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Support for in-house and on-site tax audits

Kasyanenko & Partners Law Company specialists have extensive experience in providing services related to the support of in-house tax audits and on-site tax audits.

Under a Desk tax audit, it is customary to consider the control procedure by a fiscal service employee. As a result, thorough verification of the correctness of the information that was provided in the completed Declaration is performed. Compared to on-site inspections, Desk inspections do not pose a particular threat to individuals who are engaged in business activities. However, even in the process of such checks, entrepreneurs must be prepared for certain risks.

As for conducting an on-site tax audit, it is set by p. 75.1.2 of the Tax Code. It is carried out at the location of the business entity or at the location of the object belonging to it.

  • Conducting detailed consultations on tax audits.
  • Assist in the appeal against the decision made on the part of employees of tax inspections.
  • Preparation of necessary explanations, as well as a set of documents according to requests from regulatory authorities.
  • Full legal support during inspections by employees of the tax Inspectorate.

Where does the inspection take place?

All control measures are carried out in the tax office, which excludes the departure of the legal entity to the specified address (office premises or businesses). Verification starts automatically, so you don’t need additional permission from the Manager. The presented procedure is one of the main duties of tax inspection employees.

Field check, respectively, at the place of registration of the legal entity.

What is checked by supervisors in the course of a desk audit

  • All declarations, calculations and other documents submitted by the taxpayer are thoroughly checked.
  • All received information about the economic activity of the object being checked.

There are situations when employees of the tax Inspectorate conducted an audit of the legal entity taking into account the information already received. If the legal entity has managed to submit all the necessary declarations and calculations before the end of the specified period, then the verification actions are immediately suspended. As a result, a new audit will be opened, during which the submitted documents are reviewed. All data that was received earlier (when the check was stopped) is actively used by employees of the Supervisory authorities during other checks.

Getting explanations from the taxpayer during the desk check

The main danger of in-house verification is based on the fact that neither the company nor the PE will be warned about its beginning. For example, if the test results were positive, the company may not even know that this test was performed.

In case of failure to pass the audit, when the tax inspection staff found certain discrepancies and discrepancies in the figures, the company receives a notification. This notification will indicate a request to change the data in the Declaration or to provide an explanation for the discrepancies received. The entrepreneur must fulfill this request within 5 working days after receiving it. Today, tax inspection employees support working with taxpayers through electronic document management.

In addition, the taxpayer has the opportunity to back up their explanations by providing various documents and receipts for confirmation. This can be a primary or various contracts signed with contractors. At the same time, Ukrainian legislation does not require entrepreneurs to give explanations with the mandatory provision of supporting documents. Thus, in the process of conducting an in-house audit, supervisors do not have the right to require additional documents from a legal entity.

The inspector who checks the company must carefully examine all the data that was submitted by the taxpayer. If an employee of the tax service noticed that the taxpayer violated specific rules, then it is necessary to draw up an act.

In the absence of such violations, the organized check automatically ends. At the same time, the taxpayer does not receive any notifications indicating that the audit has been completed and that there are no violations.

The presence of violations becomes the reason for the formation of the corresponding act, which is received by the head of the company. Within 1 month after receiving this act, the company can submit its  objections. Thus, the inspector of the tax service considers the received objections and previously made conclusions of the audit. Next, the issue will be resolved regarding the possible prosecution of a business entity as a result of a violation.

If these requirements are received, it is recommended to seek the help of a qualified lawyer who will be able to convey the taxpayer’s position in a reasoned manner. Kasyanenko & Partners Law Company specialists have repeatedly participated in various in-house inspections. Thus, we know exactly what features are important to pay priority attention to to deal with issues.

After all, in the process of organized inspections, tax service employees often pursue economic benefits. If accountants or company executives demonstrate their disagreement with the findings, they are subjected to psychological pressure, threats and intimidation (for example, criminal proceedings), as well as huge sums of money that will be forcibly accrued.

To avoid this. it is very important to use the services of lawyers and lawyers in tax matters during field inspections, as well as if you received a problematic act after a desk check. Thanks to professional legal support from Kasyanenko & Partners Law Company, it will be possible to prevent illegal conclusions and conclusions with obvious violations on the part of employees of the tax Inspectorate. Also, during inspections on illegal grounds, it will be possible to minimize the definition of various violations, fines, and sanctions.

Dmytro Kasyanenko

Lawyer, managing partner of the Kasyanenko & Partners Law Firm. Since 2002, he has gained extensive legal experience in key positions in business structures and the public sector in the field of law and finance.

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