Tax audit is one of the tools of tax risk management - its purpose is to verify whether a given entity correctly applies the provisions of tax law and recognises transactions in appropriate settlement periods. A well conducted tax audit makes it possible, first of all, to identify areas of potential tax risks and incorrect settlements and to estimate potential negative financial consequences for a company and its management.
A tax audit also helps to identify areas for tax savings.
A tax audit may address the following areas:
- Corporate Income Tax (CIT)
- Personal Income Tax (PIT)
- VAT
- Tax on civil law transactions (PCC)
- Property tax
Tax audit – risk management
During tax audit we put particular emphasis on the most vulnerable areas susceptible to dynamic changes in tax law and new interpretations issued by tax authorities.
Our tax audit includes an evaluation of the company's source documentation in selected areas for the correctness of tax settlements.
Tax audit - report
Tax audit involves a random analysis of selected source documentation (e.g. books of accounts, invoices, records, declarations and trade agreements) and verification of the company's internal policies.
The result of the tax audit is a report summarizing the identified irregularities and risk areas including practical ways of their elimination as well as recommendations on how to mitigate these risks in the future.
The list of corrective actions includes necessary modifications and supplements to the documentation.
Examples of risk areas 2019/2020
- White list of VAT payers - payment for a specific value transaction to the contractor's account, which is not included in the so-called "white list", results in the exclusion of this expenditure from tax deductible costs. Moreover, the purchaser will answer jointly and severally with the seller if the seller does not settle the VAT on this transaction.
- Bad debts relief and the anti-backlog act - the fiscal burden of unpaid invoices is transferred to the debtor.
- Tax schemes reporting (MDR) - failure to identify and report a scheme is subject to a fine of up to PLN 21.6 million.
- Tax microaccount - payment of tax to the incorrect tax account is not considered an effective tax settlement.
- New VAT rates matrix - a complete change in the approach to setting the VAT rate for goods and services at reduced rates.
- Split payment - payment without the split payment mechanism means no right to include the incurred expenditure in tax costs and an additional sanction of 30% of VAT indicated on the invoice; possible liability in the form of a fine up to PLN 25 million.
- Withholding tax - charging tax at the national rate will be the rule; the application of an exemption or a reduced rate will be subject to certain formal conditions.
