Journalists of Ukrainian Business Resource prepared an article about our event
The article is available on website of UBR under the link - http://ubr.ua/business-practice/laws-and-business/psihologiia-dlia-buhgaltera-perejit-nalogovuu-proverku-pomojet-akterskoe-masterstvo-174773.
"An excellent saying “Informed means armed” reflects the true reality of tax audits practice. Official statistic indicates that number of tax audits is getting lesser but taxpayers note that audits have become stricter and inspectors - more demanding. Auditors and lawyers are trying to help an ordinary accountant and company in general.
For this reason audit firm “Aksyonova and Partners” (Geneva Group International) together with law firm “Pravova Dopomoga” organized a business-lunch for accountants and managers of leading Ukrainian companies on topic of “New Approaches in accompany of tax audits. Effective administrative appeal”. The topic of the meeting was chosen on purpose because tax authorities are actively executing innovations, improving the technique of audits conduction. Today it is important to track all the trends and prepare oneself thoroughly. Experts say: “Good improvisation is a well rehearsed improvisation”. A tax payer cannot afford to act the old way and use non - effective approaches. One should differentiate himself, surprise inspectors while being maximally opened and truthful. Basically one should act proactively.
“You must be the one in control over the process. Also you should use provided 10 days before an audit effectively. Prepare everything thoroughly, think about the possible ways of impressing an inspector” – said the leading partner of the audit firm Olena Makeyeva.
According to her a lot depends on the mental attitude and innovational approaches in dealing with tax authorities. "It is important to remember that first impression can determine the outcome of an inspection".
The expert focused on the fact that preparing for a tax audit is a systematic team work which consists primarily of a thorough preparation for inspection. According to her the biggest mistakes are made by accountants right after an inspection warning. In vanity and panic before the arrival of an "auditor" a lot of mistakes are made that can cause troubles for a company. As the expert said auditors should provide a presentation of company and business, demonstrate accounting, marketing policy, internal control system and show that company is opened and transparent to inspections.
Additionally the expert warns accountants against hasty decisions and any written statements without consulting with managers and legal department. "Therefore one cannot make any decision that grounds on emotions. This is clearly a wrong decision. One should control his emotions," - she said.
As an example Olena Makeyeva brought a case when a bookkeeper provides explanation that all documents were provided to inspectors. "After this you will not be able to provide any other documents for the administrative or judicial appeal of a tax notice" - she explained.
The head of Law Firm "Pravova Dopomoga" Volodymyr Gurlov reminded that in tax relations one may often observe conflicts between tax authorities and legal entities as taxpayers. Tax auditors overindulge incorrect application of law on the matters of taxation, billing operations, cash flow and licensing, they are not paying proper attention to documenting and reviewing of audit materials that results in numerous cases of unlawful imposition of additional taxes and financial penalties. One resolution for the conflicts and a form of entities protection is an administrative appeal of tax authorities acts (tax obligation notification). In this regard lawyers give their advices to those who expect a tax audit.
"Stay quiet” You should avoid violations that fall under tax audit long before the company will be visited by tax inspectors. This also goes for "fiscal holes", fictitious agreements, inflated costs.
"Dig trenches and build bunkers." Accountant and manager should always be prepared for a tax audit. And get ready for “defense” in advance. Prepare the documents that can insure all of you possible actions. "Watch out for the paperwork. Upon the time of inspection all the documents need to be ready and signed. Mind court decisions, but don’t let the case to be taken to the court" - said the lawyer
"Approach the process creatively." Experts warned accountants against excessive camaraderie with tax inspectors. According to experts since the first day of a tax audit you should keep distance between you and inspectors. On the contrary you should make an accent on the fact that the audited company is a serious business that is ready for dialogue with the State Tax Service.
"Engage lawyers." Appeals against decisions of tax authorities should not be standard. Accountant without legal education cannot correctly prepare an administrative complaint and win the case in future. Moreover lawyers believe that accountants should not go to courts without their support. "Everyone should do their own work" - they say.
“Absolute readiness” If you are not ready for the process of administrative appeal you shouldn’t start it in the first place. You must be absolutely confident and act without any hesitation.
For a reference:
Administrative appeal is a set by legislation defense regime of violated by tax authorities rights and legitimate interests of legal entities which is conducted in the form of complaint submission and means the obligation of tax authorities to respond and take measures on the matter of listed issues during the set term. Administrative appeal of tax obligation notifications in Ukraine is duplex.
Tax Service is interested in not allowing of tax obligation notifications cancellation since it will negatively influence its ratings of imposed taxes and applied sanctions. On the other hand right of administrative appeal against tax authorities decisions is an important and necessary mechanism of pre court dispute settlement between tax authorities and tax payers. Settlement of such disputes within administrative appeal allows to save time and energy avoiding a judicial appeal.”
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