Tax audit is an integral part of doing business and requires special training. This article contains important nuances that you need to pay attention to and tips that will greatly facilitate this procedure in Belarus.
Who can conduct a tax audit, and for what period
Compliance with tax legislation can be inspected not only by tax authorities. The bodies of the Financial Investigations Department of the State Control Committee can also check.
The period of the company’s activity for which the audit is carried out depends on many factors: the grounds for the audit, the type of audit (planned or unplanned, thematic or complex, selective or desk), and which government agency conducts the audit.
The total period for inspections of compliance with tax legislation provided by the Tax Code is 5 calendar years. These 5 years precede the year the decision to conduct a tax audit was made. The period under review also does not include the expired period of the calendar year in which the decision to conduct the audit was made. The tax service checks other issues that do not relate to tax legislation for the previous 3 years.
When the test period may be more than 5 years
In some situations, the company’s activities can be checked for over five years. The most common conditions:
- When an audit is scheduled for an initiated criminal case, especially in connection with tax crimes.
- When they check compliance with budget legislation.
- When additional checks are carried out.
How to know that you will be tested?
You can find out about a random scheduled check, but you are not warned about an unscheduled one. You can find out whether a company or an individual entrepreneur has been included in the random inspection plan online on the State Control Committee of Belarus website. An inspection plan is posted there and regularly updated. From the inspection plan, you can find out in which month of the calendar year the inspection is planned and which government agency will conduct it.
Before the start of the audit, the state body sends a notification to the audited company or individual entrepreneur about the audit. The notification specifies the period during which the check will occur.
You will not be able to ignore the notification. It is handed over personally to a company representative or sent by mail to the address in the tax office. It is believed that the company received the notification three calendar days after it was sent.
Is it possible to postpone the verification period?
After receiving the audit notification, the company, an individual entrepreneur, has such an opportunity. Suppose some reasons will not allow the verification to be carried out within the period specified in the notification. In that case, you must apply for postponement of the verification period within three days from the date of its receipt. This does not guarantee that the inspection will be postponed since the state body will consider the application and may decide to postpone the inspection period or refuse to postpone it.
Where to arrange the inspectors?
Usually, inspectors are allocated a room suitable for checking documents. There is no special list of requirements that such a room must meet. However, it happens that a company, and especially an individual entrepreneur, does not have a suitable room for inspection. In this case, and by the decision of the state body, the inspection may be carried out at the premises of the controlling state body.
Currently, most tax audits are conducted in the tax office, where a representative of the company, an individual entrepreneur, brings the documents that the inspector requests.
What will be checked?
The complete list of issues that the tax service will check is provided in the notification of the audit. Such notification is sent to the person whose activities will be checked no later than 10 working days before the inspection.
In addition, the list of issues to be checked is prescribed in the order for the inspection. This is a document that the inspectors hand over to the head of the company or his representative on the day of the start of the audit.
The Tax Inspectorate only checks issues that fall within the scope of its control activities. That is, the tax service will not check, for example, the company’s compliance with legislation on intellectual property, advertising, and licensing. However, if the inspectors notice violations of other legislation, not tax, they will inform law enforcement agencies.
Tax authorities have a wide range of competencies in control activities. These competencies are enshrined in the Belarusian legislation. Here are some of them:
- They monitor compliance with tax legislation and legislation on entrepreneurship.
- They control the correctness of paying taxes.
- They control the procedure for accepting cash, using cash register equipment, and the procedure for settlements between companies and individual entrepreneurs.
- They monitor compliance with legislation on the turnover of alcohol, tobacco, and raw materials for their production.
- They control accounting by individual entrepreneurs, tax accounting, and income and expense accounting under a simplified taxation system.
- They control the accounting.
- They control the labelling of goods with unified control marks or identification means.
Based on the competence of the tax authorities and the list of issues to be checked prescribed in the audit notification, you can prepare the necessary documents.
What can be corrected before the start of the tax audit?
- Before starting the tax audit, you can submit updated tax returns. This should be done when the company has discovered mistakes in previous tax returns that have already been sent to the tax service. The peculiarity is that declarations with carried changes are submitted according to the form of the valid tax return in the period for which the changes are being made.
- When it is necessary to clarify tax returns for those taxes that are calculated without accrual, adjustments are made to the declaration for the period in which inaccuracies were found.
- Make an inventory of assets and liabilities. During the inventory, you can find accounting errors and settlements with business partners. Such errors can be eliminated in time before the start of the tax audit.
- To conduct an audit of accounting documents. During the audit, it is necessary to check whether all the primary documents are in place and correctly executed to restore the missing and primary accounting documents. Please note that if you have several controlled companies, you should avoid storing accounting documents of different companies together. It is also necessary to pay attention to the correctness of the transfer of cases in the event of a change of the company’s chief accountant.
- Talk to the employees who will communicate with the inspectors. Employees can be instructed on the information and documents that must be submitted to the inspectors. Also, the inspectors may need written explanations from the company’s employees. Therefore, it is necessary to recommend that employees notify the head or his representative about this before giving explanations.
- Invite an auditor. The auditor may conduct a tax audit in the interests of the company. In this case, the company’s liability for non-payment of taxes is not assumed if the audit shows such non-payment. The company will have a chance to fix everything, make an additional payment and file an updated tax return.
- Prepare financially. It should be understood that during the tax audit, there may be violations for which you will have to pay. Therefore, we recommend paying off creditors, perhaps even earlier than the usual settlement period, and creating a financial cushion in case of additional taxes, penalties, and fines.
What can the chief accountant check before the tax audit?
You can recalculate taxes yourself and check your tax records. Pay special attention to value-added and income taxes, as most mistakes are made when paying these taxes. Attention should be paid to the correct definition of the tax base and the distribution of tax deductions. When self-checking the income tax calculation, it is necessary to check the correctness of including the amounts in the costs and whether they are all supported by documents.
It is possible to reconcile calculations with the tax service to ensure compliance with accounting and tax inspection data. When such data does not match, you need to find out the reason for the discrepancy and make changes to the accounting.
How we can be helpful in preparing for a tax audit
Our employees are experienced specialists in the field of tax law. We can:
- Advise you on the preparation of business processes and documents for tax audit.
- Conduct a tax audit of your company’s documents.
- Assist in restoring accounting and tax accounting documents, reconciliation of calculations.
- Represent your interests in government agencies on issues related to tax audit.
Contact us
If you have any questions related to conducting a tax audit, we will be happy to help you resolve any disputes.
Phone and e-mail communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@ambylegal.by.
