19 July 2024

Tax inspection – everything you need to know

A tax inspection (audit) is designed to verify the accuracy of a taxpayer’s accounts. For it to be carried out by the law, the tax office follows strict procedures.

The tax inspection for initiating an audit begins with the delivery of a ZAW-K notice to the taxpayer. This document contains information about the scope of the audit, the type of tax to be checked, and the period covered by the audit. A tax audit may begin no earlier than 7 days and no later than 30 days after the service of the ZAW-K notice.

The notice of intent to initiate a tax inspection shall contain:

1. designation of the authority;
2. date and place of issuance;
3. designation of the controlled party;
4. indication of the scope of the control;
5. instruction on the right to file a correction to the declaration;
6. signature of the person authorized to give notice.

If the audit is not started within 30 days, the taxpayer must receive a new notice. In exceptional situations, with the consent of the taxpayer, the audit may begin earlier than after 7 days.

The audit begins by serving the taxpayer with authorization to carry out the audit and presenting the official ID cards of the auditors. In the case of legal entities or unincorporated entities, these actions are performed against their representatives.

Prerequisites for unannounced inspection

Following Article 282c of the Tax Ordinance, no notice shall be given of the intention to initiate a tax inspection if:

• it concerns the legitimacy of the tax difference refund or input tax refund within the meaning of the VAT regulations;
• it is to be initiated at the request of the authority conducting pre-trial proceedings for a crime or fiscal crime;
• it concerns the taxation of income not covered by disclosed sources or derived from undisclosed sources;
• it concerns undeclared business activities;
• it is to be undertaken based on information obtained under the provisions on anti-money laundering and financing of terrorism.

In this case, the inspectors present only an official ID card, and the audit authorization must be delivered within 3 working days of the audit.

A tax inspection is a complicated process that requires adherence to strict procedures. Taxpayers should be aware of their rights and obligations and take advantage of the opportunity to submit corrections to their accounts before the audit begins. When in doubt, it is advisable to consult a tax advisor to ensure that the audit proceeds properly and minimizes the risk of irregularities.