Tax Audits and Disputes

A dispute breaks down into separate issues. On some points the company's position is supported by documents, on others it is not, and the conclusion on one issue is not carried over to the rest without a separate analysis.

The position is built on the actual circumstances and on the materials gathered during the audit: a discrepancy between how a transaction has been documented and how it appears from the other party's documents becomes the subject of the dispute.

Replies to requests are assessed together with the objections. Explanations given during the audit are later compared with the arguments in the objections and the appeal: discrepancies between them weaken the position, and each reply is prepared taking into account how the dispute may end.

• Requests for documents and explanationsThe tax inspectorate is seeking documents and explanations; there is as yet no dispute as such.
• Desk tax auditQuestions arise from the figures in the reports submitted and the tax returns filed.
• Field tax auditDocuments for the period under audit are requested, tax control measures are carried out and employees are summoned to give explanations.
• Tax audit reportThe tax inspectorate's findings are set out in writing, and objections are prepared.
• Decision assessing additional taxesTax charges, late-payment interest and penalties have been imposed, and the dispute moves to the appeal stage.
• Court proceedingsThe tax inspectorate's decision and the demands issued on the basis of it are challenged in court.
• Issues relating to specific taxesVAT deductions, expenses deductible for corporate profit tax purposes, insurance contribution assessments.

• Written assessment of the situationAn analysis of the tax inspectorate's findings, with an assessment of which of them are supported by the materials gathered.
• Replies to requestsPrepared explanations and the documents selected to accompany them.
• Objections to the reportA written position on each disputed issue.
• Appeal to the higher tax authorityThe prepared document with annexes.
• Court materialsThe application and written submissions in the case.
• Participation in proceedingsPresenting the position when the audit materials are considered and at court hearings.

The outcome of the service is the work performed within the scope agreed with the client.

1. Materials

   The position is built on the documents and the circumstances of the case; the following points are relevant.

   • Requests and enquiries from the tax inspectorateEverything received since the audit began.
   • Reporting for the period under auditIn the form in which it was submitted.
   • Contracts and primary documentsFor the transactions that raised questions.
   • Correspondence on disputed transactionsWhatever has been preserved in work channels and email.
   • Explanations previously givenWhat has already been communicated to the tax inspectorate, and in what form.
   • Audit report or decisionIf they have been received.

2. Assessment

   On the basis of the materials, the strengths and weaknesses of the position, the risks and the possible courses of action are identified.

3. Plan

   For the chosen option, a plan is drawn up: the sequence of steps, timing and scope of work.