Tax audit in the company, its time, place and course

Tax audit is aimed at checking whether entrepreneurs comply with the obligations imposed on them by law. The provisions related to the conduct of inspections are regulated in the Tax Ordinance and the Entrepreneurs' Law. They define, among others: the place and time of corporate control. Where and when should it be carried out then? Answer in this article.

The course of the control

As a rule, the entrepreneur to whom control activities are to be carried out receives a notification from the competent tax office about the planned initiation of control. It should contain, inter alia, its expected date, as well as the date of its completion and the scope of activities that will be subject to it. The time of corporate control should therefore be determined in advance.

The inspection begins with presenting the inspected person or a person designated by him with an identity card authorizing it to be carried out by the employees of inspection bodies and after delivering an authorization to carry it out. It should be carried out in such a way as not to disturb the work of the controlled entity and other employees.

After completion of the inspection activities, a protocol of the inspection process is prepared. Pursuant to Art. 290 § 2 it contains in particular:

• indication of the controlled;
• an indication of the controlling persons;
• determination of the subject and scope of the inspection;
• determination of the place and time of the inspection;
• description of the factual findings made;
• documentation of the evidence taken;

• legal assessment of the case under review;

• instruction on the right to submit reservations or clarifications and the right to correct the declaration;

• information on the obligation to notify the tax authority by the inspected party of any change in its address within months from the date of completion of the tax audit, if irregularities were found in its course, and the consequences of failure to comply with this obligation.

The inspection report should be made in two identical copies, one of which should be kept in the documentation of the inspected entity.

Place of inspection

The place and time of corporate control is detailed in Art. 285a of the Tax Code, according to which:

Art. 285a of the Tax Ordinance
§ 1. The control activities are carried out at the controlled seat, in another place where the documentation is stored and in places related to the activities carried out by him and during the hours of its operation, and in the case of shortening of the time during the control of the activity - control activities may be carried out for 8 hours a day. If the tax books are kept or stored outside the registered office of the controlled entity, the controlled entity, upon request of the controller, is obliged to provide access to the books at its premises or in the place where they are kept or stored, if making them available at the premises may significantly hinder the ongoing operations of the controlled entity.
§ 2. The provision of § 1 shall also apply in the event that the controlled entity operates in a residential premises.

As stated in the regulation, the place of inspection is the place where the documentation of the activity is kept. Therefore, the control may take place at the seat of the controlled entity, but it may also be carried out at the seat of the accounting office, if the documentation of the activity is stored there.

Time for corporate control

The regulations also regulate the time of corporate control. According to them, the course of a tax inspection should take place during working hours or during the actual performance of business activity by the inspected party.

The inspection should be carried out not earlier than after 7 days and not later than within 30 days from the date of delivery of the notice of intention to initiate it.

It may also start before the deadline of 7 days, only after the consent of the entrepreneur. However, if 30 days elapse from the notification without initiating the inspection, the tax authority should provide the inspected person with a new notification in order to carry it out.

The duration of all inspections during a given calendar year at a given entrepreneur is specified in Art. 55 sec. 1 of the Entrepreneurs' Law. According to it, the time of corporate control may not exceed:

• 12 working days for micro-entrepreneurs;

• 18 working days for small entrepreneurs;

• 24 working days for medium-sized enterprises;

• 48 working days with other entrepreneurs.

It should be borne in mind that the time of company control may only be extended in specific cases. Namely:

• for reasons beyond the control of the controlling body and requires a written justification, without prejudice to the time limits specified above;

• if in the course of the inspection an understatement of the tax liability in the amount exceeding the equivalent of 10% of the declared tax liability, but not less than PLN 500, or an overstatement of the loss exceeding the equivalent of 50% of the declared loss amount, but not less than PLN 2,500, is revealed, or in the case of disclosure of the fact that the declaration has not been submitted despite such an obligation - the period of extending the inspection in this case may not exceed twice the period specified in art. 55 sec. 1 of the Entrepreneurs' Law.

To sum up, the time of corporate control should be directly specified by the controlling body, so that the entrepreneur has time to prepare appropriate documentation, employees or, if necessary, to establish a person authorized to represent the controlled during his absence. In addition, remember to prepare the place where the inspection will take place and ensure that all necessary documents are available.