Legal Support for Tax Audits

The most common form of state control over business is the tax audit carried out by representatives of the fiscal service. The main goal of such a measure is to timely detect violations of the law and non-compliance with tax obligations by taxpayers, thereby contributing to the establishment of fair conditions for all participants in business activity.

However, what is a standard control mechanism for the state often becomes a serious challenge for entrepreneurs themselves. Under the conditions of increasingly strict fiscal policies, the risk of making a mistake and jeopardizing one’s business significantly increases. For this reason, it is crucial to arrange for legal support from an experienced lawyer in advance. A deep understanding of the rules and procedures governing the tax obligations and rights of business entities allows such a specialist to establish effective cooperation with the tax authorities.

Features of Tax Audits and the Laws That Regulate Them

A tax audit is the inspection of enterprises and individuals officially conducted by the fiscal authority to check compliance with Ukrainian legislation. The Tax and Administrative Codes, as well as other regulatory legal acts, serve as the tools that regulate this procedure.

Important Details to Know

• Alongside the tax inspection, other regulatory authorities may also conduct audits.
• Representatives of the State Fiscal Service (SFS) are authorized to request financial information, audit financial and economic activities, and more.
• Taxpayers have the right to participate in the audit, and they are obligated to provide documents and data at the inspectors’ request. The legislation also allows them to defend their rights and interests during such inspections.
• Violation of tax laws may result in fines, cancellation of benefits, and other types of sanctions.

Types of Tax Audits

According to current legislation, several types of tax audits can be conducted. A particular type of inspection is applied only if the procedure for its initiation is followed — there are clear conditions and situations under which a certain audit may be initiated.

Desk (Cameral) Audit

This is conducted on the premises of the tax authority by reviewing tax returns and information obtained from the VAT electronic administration system, the Unified Register of Tax and Excise Invoices, etc. Tax reporting is checked comprehensively. The SFS is not required to obtain the taxpayer’s consent to carry out this procedure, nor is any special authorization from the head of the tax authority needed.

Documentary Audit

During this procedure, the following is examined:

• Whether taxes and fees stipulated by law were paid on time and accurately.
• Whether currency, labor, and other legislation was observed.

To determine these and other facts, statistical and financial reports, tax and accounting registers, and primary documents on the payment of taxes and fees are used.

Documentary audits are divided into scheduled ones — which are conducted according to a pre-established schedule — and unscheduled ones, which may be either on-site or off-site. Such audits are regulated by Articles 77–79 of the Tax Code of Ukraine.

Actual Audit

This involves a physical inspection of the enterprise by a representative of the tax authority. Tangible assets, and compliance with regulations and legislation, are subject to inspection. The inspection is conducted without prior notice to the taxpayer. The grounds for conducting an actual audit are provided in Article 80 of the Tax Code of Ukraine.

When Legal Support is Necessary

Legal support during a tax audit is relevant in any case, both for individuals and legal entities. The reason is that not every entrepreneur knows how to properly defend themselves during tax inspections. Moreover, it is not always possible to stay up to date with the latest changes in legislation. Any detail, even one that seems insignificant at first glance, can become grounds for imposing a fine.

Overall, the main objective of legal support is to prepare for a potential tax audit. Seeking legal assistance is especially important when there is indirect or direct evidence that a tax audit of your business is imminent. Most often, support during tax inspections is required in cases of:

• Scheduled and unscheduled business audits
• Correction of identified errors in accounting, tax payments, etc.
• Inspection of tax-related activities
• The need to monitor proper documentation practices
• Conducting large transactions or changes in business models
• The need to defend the rights and interests of the entrepreneur

Stages of Tax Audits and Our Support

The services of our law firm allow you to successfully navigate all stages of a tax audit. We help not only in preparing for the audit, but also accompany you during the actual inspections. In case of negative conclusions, we ensure prompt and effective response, allowing for the most fair outcome in the situation.

Preparatory Work

Preparation for tax audits should be carried out alongside accounting and business activities. It is important to properly document all transactions and assess their legal consequences. Our specialists help assess the risks of certain actions and discuss legal nuances.

The preparation strategy can be outlined as follows:

• Engaging experts
• Organizing HR records
• Training staff in basic accounting
• Arranging expert support for accounting processes

Conducting the Audit

At this stage, a lawyer from AA Lawrange monitors the actions and requests of representatives of the fiscal service, ensuring timely and appropriate responses and communication with the regulatory authority. The legality, correctness, and validity of the audit are closely observed. All of this, taken together, helps successfully pass the audit in most cases, without unnecessary stress.

Responding to the Conclusions

Quite often, the results of tax audits do not satisfy business owners — the accusation of violating tax legislation may be unfounded. Tax authorities may make mistakes during the audit, such as ignoring objections to the audit report, exceeding the permitted review period for documents, initiating repeated audits on the same grounds, etc. It is possible to defend one’s rights by appealing the audit results in court. A lawyer from AA Lawrange will promptly carry out a pre-trial appeal of the tax audit’s outcome, applying their knowledge, experience, and legal means. If it is impossible to achieve the desired result this way, a lawsuit will be prepared and filed to ultimately restore justice.

Our Services

AA Lawrange offers a full range of services that entrepreneurs may need during inspections by regulatory authorities, including tax authorities. Among other things, in our company you can benefit from:

• Expert review of financial and tax documents.
• A strategy specifically developed for you to ensure compliance with tax legislation requirements.
• Representation on your behalf in communication with tax authorities.
• Systematic support in maintaining documentation.
• Document preparation services in case of receiving a request from the tax office.
• Legal support when it is necessary to protect business interests and rights in disputed situations — for example, we will provide an appeal against the order to conduct an audit.
• Consulting on matters of tax ethics and practice, etc.

Why Choose Lawrange

The specialists at our AA have extensive experience in supporting tax audits, deep knowledge and understanding of Ukrainian legislation, and always stay up to date with any changes in it. This allows us to provide all necessary services at a high level of quality to ensure compliance with the rules and requirements of tax and financial accounting, and more. By using professional support, you ensure protection from significant risks and unnecessary stress. AA Lawrange is a reliable partner that offers individual and effective solutions, time savings, and rapid response to any emergency situations involving regulatory authorities.

FAQ

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