SFS (State Fiscal Service) business inspections: when and on what issues are they carried out and what should you do

One of the key practices of our firm is the assistance in registration, licensing and servicing of business entities. However, the registration and obtainment a license is not the last time when you will need to interact with governmental authorities in the course of doing business.

When carrying out any activity, you need to be prepared for inspections by the controlling bodies of the authorities, which are carried out to monitor compliance with legal requirements.

Today we will talk about inspections by the State Fiscal Service of Ukraine (HFS) and consider the following issues:

  • how often do they have the right to carry out such inspections ;
  • what issues are the subject of an inspection?

What inspections does the HFS carry out?

Despite these or other features, each business is inspected, first of all, by the SFS authorities.

Today, the SFS authorities carry out the following types of inspections:

A desk audit is carried out at the SFS premises solely on the basis of declarations, statements, etc. submitted by the taxpayer.

The subject of this kind of an audit is the timeliness of reporting, declarations, tax invoices, etc. For a desk audit, the consent and presence of the taxpayer are not needed.

In case of failure to provide reports or late submission, after such an audit, you may be charged with a fine.

If your company has a fairly significant scope of business operations, and the amount of reporting that needs to be submitted is quite extensive, in such cases it is advisable to hire an accountant/lawyer or contact a company that provides respective comprehensive services.

Documentary inspection - it can be scheduled and unscheduled, on-site and remote.

The subject of this kind of inspection is the timeliness, correctness, and completeness of payment of all taxes or fees, compliance with currency laws and verification of the legal registration of labor relations with employees.

Important! Documentary scheduled inspections are carried out in accordance with the schedule for such inspections. The schedule may change, about which respective information is published on the website of the state body.

Many are afraid of such inspections since they are carried out at the location of the taxpayer and if there are grounds clearly defined by the Tax Code. However, the taxpayer must be duly notified of the time and place of such an inspection.

If you have not been duly notified of the audit, you have the right to prevent the regulatory body from carrying out the inspection.

Violations by the regulatory authorities during the audit can be avoided if you turn to lawyers who provide qualified services in the legal support of the inspection by the SFS.

Related article: Why is it useful to comply with the term of appeal against tax violation notification letters?

An ex poste audit - this type of audit is the most meaningful and objective, since the actual data on cash flow, availability of licenses, compliance by the employer with legislation on the conclusion of an employment contract, registration of labor relations with employees (hired workers) are audited.

They are held at the place of the actual conduct of the activity (business). For example, in the case of the medical business, the inspection will be carried out in a room where medical care and medical practice services are directly provided.

Such inspections are carried out on the grounds specified by the Tax Code. Often this happens in connection with information received about possible violations by the taxpayer of legislation on issues that are the subject of such an audit.

How to pass the audit without problems?

To successfully pass the inspections conducted by the SFS, you should:

  • correctly and timely fill out and submit the necessary reports;
  • duly formalize labor relations with employees;
  • have the necessary license required for the conduct of activities;
  • comply with other currency and tax laws.

However, as the judicial practice of recent years shows, even having fulfilled all the requirements of the law, today, unfortunately, you cannot be 100% sure that according to the results of the inspection, the SFS authorities will not hand you a tax notice decision (TND) on a violation of the norms tax and currency laws. The quality of enforcement of tax legislation and the professional competence of employees of the SFS bodies does not guarantee a correct and objective decision based on the results of a particular audit.

Remember! You can appeal the results of such an audit in an administrative or judicial manner.

When appealing the TND, it is important to correctly indicate all the circumstances of the case and correctly draw up a statement, since this directly affects its consideration. We can help you with this process. You can see the results of our successful practice here.

The involvement of a qualified lawyer in the audit will give you confidence in its result and significantly reduce the level of stress. Indeed, in-depth knowledge of the rules of law and awareness in the process enables the lawyer to correctly answer any questions of regulatory authorities, help you prepare for the audit in advance and carefully monitor compliance by the regulatory authorities with the correctness of the audit.

If you want to learn more about the peculiarities and possible consequences of a particular type of audit of your business, you can seek professional advice from our company in a convenient way for you.

Publication date: 29/08/2019

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