What it usually looks like
It usually starts with something routine: a request for explanations, a request for documents, a notice of intention to start an audit. Sometimes the tax office asks about a single invoice, sometimes about several years of returns. Uncertainty creeps in – is this routine, or the start of something more serious? The first questions are always the same: what is the office asking about, by when do we have to reply and who in the business is responsible?
An audit does not necessarily mean a dispute. Many matters end with factual explanations and a complete set of documents. A dispute begins only when the tax office and the business assess the same facts differently or read the same provision differently. The matter then moves through further stages: proceedings, a decision, an appeal and finally – if necessary – the court.
At each of these stages the same things count: documents in order, a consistent account of events and keeping to deadlines. The sooner someone looks at the matter from the outside, the more can still be done.
Points to watch
Deadlines run from delivery
There is usually little time for a reply, objections or an appeal, and the deadline counts from the day the letter was received – even if reception signed for it or it landed in an electronic mailbox nobody checks. It is worth deciding straight away who in the business receives correspondence from the tax office and who they pass it on to.
One account of events
Explanations given by different people – the accountant, a salesperson, a board member – should describe the same thing. The tax office will read any discrepancies, even innocent ones, against the business. Before anyone replies, it helps to gather the facts in one place.
Documents speak louder than memory
Contracts, orders, correspondence, delivery and payment confirmations show what the transaction really looked like. It is better to spot any gaps yourself and fill or explain them than to wait for the inspector to point them out.
Not every request needs everything
The tax office has the right to ask, but within certain limits. Handing over extra documents just in case drags in issues nobody asked about. We answer thoroughly and precisely what the office has asked for.
A correction is a decision, not a reflex
Sometimes correcting a return closes the matter; sometimes it concedes a point where the business has strong arguments. This decision is best taken after working out the consequences, not under pressure from the first conversation with an official.
How we work – step by step
We read the letter and note the deadlines
We check exactly what the matter concerns, what stage it is at and by when a response is needed. At the outset we agree what is urgent and what can wait.
We gather the facts and documents
We talk to the people who know the transactions and put the documents in order. The result is one consistent account of events – the basis for all further letters and conversations.
We assess the risk and propose a plan
We say plainly where the business has strong arguments and where they are weaker, what each scenario involves and what we recommend. The decision is always yours.
We handle correspondence and talks with the tax office
We prepare explanations, objections and letters, and take part in audit procedures. We make sure the file contains everything that speaks in the business’s favour.
If needed – appeal and court
If the tax office issues an unfavourable decision, we prepare an appeal and, if necessary, a complaint to the court. At every stage we do the sums again: is continuing the dispute still worthwhile?
Afterwards – lessons learnt
Finally, we point out what to change in contracts, document flow or returns so that similar questions from the tax office have a ready answer next time.