A tax audit is one of the most important and at the same time most stressful events that an entrepreneur can encounter in the course of doing business. Although its primary function is to verify that the taxpayer is fulfilling its obligations correctly, many business owners perceive it as a situation that potentially threatens the financial stability and reputation of their enterprise. Fear often stems from ignorance or circulating myths, while the reality - while challenging - is well grounded in regulations and procedures.
Legal and institutional bases of control
In Poland, fiscal control is based on several key pieces of legislation, the most important of which is the Tax Ordinance. It is the one that specifies who can conduct an audit, in what cases and how it should be carried out. Alongside it is the National Tax Administration Law, which regulates so-called customs and fiscal inspections. In addition, there is the Law on Entrepreneurs, which sets certain time and procedural frameworks for administrative authorities vis-à-vis business entities.
Nowadays, the digitization of tax processes also plays a huge role - systems such as JPK or KSeF allow offices to access accounting data quickly and accurately, which makes many audits based on algorithmic analysis and data cross-comparisons performed earlier. As a result, more and more audits are selective and focus on specific irregularities.
The course of the control and the moment of its initiation
A typical tax audit begins with a written notice, which is delivered to the business at least seven days before the scheduled start of operations. This time not only provides an opportunity to organize documents and prepare the company internally, but also allows for the correction of any errors in tax returns without incurring additional consequences. A correction submitted before the inspectors come into effect is, under the regulations, treated as a display of goodwill on the part of the taxpayer.
The situation is quite different in the case of customs and tax inspections, which can be initiated unannounced, especially when a tax crime is suspected or evidence needs to be secured. In such cases, officials may appear suddenly, but still have to identify themselves and submit relevant documents proving the legality and scope of their actions.
Powers of controlling bodies
Revenue officials have broad powers that allow them to conduct inspections in an efficient and lawful manner. They can visit a company's premises, demand access to documents, inspect goods, ask questions of those involved in accounting and financial operations, and take copies, minutes and memoranda. They can also secure evidence if there is a risk of destruction or concealment.
This, however, does not mean that their powers are unlimited. The law is clear that the inspection must take place during business hours and in a way that does not violate the normal operation of the company. For example, it is forbidden to search the owner's private premises or employees without a court order, or to demand information protected by professional secrets, such as attorney, doctor or notary public secrecy. The office is also not allowed to prolong an inspection without a valid reason and an appropriate notation in the documentation.
Entrepreneur's rights and opportunities
During the inspection, the entrepreneur is not defenseless. He is entitled to a number of rights, the knowledge of which can significantly affect the course and outcome of the inspection. He can participate in the inspection activities, demand explanations, file objections to the protocol and appoint an attorney to represent him before the officials. Also important is the right to file a complaint if he suspects that the inspection is being conducted in violation of regulations, such as dragging on without justification or going beyond the declared scope.
Companies are increasingly preparing for inspections by developing internal procedures for responding to the arrival of officials. These include designating a person responsible for contacting the authority, preparing available documents and informing employees how to behave. This approach can significantly reduce the chaos and uncertainty surrounding the first hours of an inspection.
The importance of reliable documentation
The most common cause of problems during audits is not intentional fraud, but deficiencies or inaccuracies in records. Keeping clear, consistent and orderly records is not only a tax obligation, but also a shield. In case of any doubts about the accounts, it is the documentation that becomes the main defense tool against charges. Companies should regularly review their returns, analyze the consistency of data in the JPK, and archive all invoices and contracts for the statutorily required period.
Cooperation with an accounting firm or tax consultant should not be limited to filing monthly returns. Professional support in analyzing tax risks, internal audits or preparing the company for possible audits can protect the entrepreneur from serious consequences. Increasingly, entrepreneurs are also opting for audit simulations, which allow them to identify weaknesses in their documentation and procedures even before the office shows up.
The end of the audit and what's next?
Completion of the inspection does not automatically mean problems. If no irregularities are found, the office draws up a protocol, which ends the entire procedure. However, if errors are found, the taxpayer can file corrections or make objections to the findings. He has fourteen days to do so from the date of delivery of the protocol. Filing objections forces the authority to consider and address them before taking further action.
Only after the audit is completed is it possible to initiate tax proceedings, which can end with the issuance of a tax assessment decision, followed by administrative enforcement if payment is not made. But it is worth noting that in many cases the office limits itself to recommendations and allows the taxpayer to correct errors on his own, thus avoiding criminal penalties.
Summary
A tax audit does not have to be a drama or the end of peace of mind for a company. Proper preparation, knowledge of the regulations and conscious use of your rights make it possible to go through it calmly and professionally. By treating the audit as a process rather than a threat, you can also use it as an impetus to put your finances in order and make your business more transparent.
If you have any questions on issues related to the inspections carried out by the tax authorities, you are welcome to contact us by e-mail at kontakt@kancelaria-pozniak.pl or by phone at +48 665 246 969.