Contents / Tax audits

TAX AUDITS

TAX AUDITS
CAMERAL
tax audits
FIELD
tax audits
Tax audits may cover no more than 3 calendar years of taxpayer’s operation preceding the year of the audit. Tax authorities may undertake separate audits of an organisation’s branches and representations, irrespective of any audit that may have previously been undertaken of the organisation itself.

COURT PROCEEDING IN A TAX OFFENCE CASE

If upon a tax audit the tax body took a decision on holding the taxpayer liable for committing the tax offence (in the form of a ruling to hold the taxpayer liable), then:

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Cameral tax audit
  • Cameral tax audit is conducted:
    • on the basis of information in tax returns and documents serving as grounds for assessing and/or paying tax without a special decision of the tax body head
    • within three months after taxpayer submits tax return and other documents
  • If the audit identifies mistakes made when filling out the forms or inconsistencies in reported data, the taxpayer is notified and requested to make the appropriate corrections within the established time limit.
  • If tax body reveals underpayment of taxes, tax demand is presented to the taxpayer.
  • During a cameral tax audit, the tax bodies may demand and obtain additional information, explanations and other documents.
Field tax audit
  • Field audit is held by decision of the tax body head (deputy head) not more often than once a year for the same taxes in the same period.
  • Conducted regardless of the time of the previous audit:
    • audit conducted in connection with reorganisation or liquidation of a corporate taxpayer
    • audit conducted by a higher tax body for the purpose of exercising control
  • Field audit is to last not longer that 2 months (in special cases a higher tax body can extend the duration of a field audit to 3 months).
  • At the end of a field tax audit the inspector issues a certificate, in which the object and terms of audit are stated
  • Based on the results of a field tax audit, an act of tax audit of the form established by the Ministry for Taxes and Charges is drawn up within two months and signed by authorised tax body officials and the head of the audited organisation or by the individual entrepreneur. If the taxpayer refuses to sign the act, a record of this shall be made in the act. If these persons avoid receiving the act, tax officials draw an appropriate act, the date of drawing which shall be recognised as the date of submitting the tax audit act.
  • Taxpayer is entitled to file a written explanation of his motives for refusing to sign the act and/or objections concerning the act with an appropriate tax body within two weeks.
  • After the expiration of this period, within two weeks the head of the tax body (or his deputy) examines the tax audit act that states tax offences revealed and other documents. If the taxpayer has presented explanations or objections, the materials of the audit are considered in the presence of the taxpayer