Tax office can take the server

The modification of Act XCII of 2003 95 § (1) on taxation, in force as of January 1, 2014 bestows on the tax authority a new power: they can examine the accounting and invoicing software and IT system of an enterprise. Today every enterprise use IT systems in their activities to a more or lesser extent. In case of smaller businesses accounting and invoicing is often outsourced: an external accounting company carries out the accounting tasks, so the responsibility of the IT system being complied with the tax and accounting laws is transferred to the accounting company. In this case, the enterprise has software necessary to carry out the activities of their activities, e.g. inventory management program, which, on a more or less regular basis, but at least annually provides data to the accounting company. The activity is not too complicated; the process is easy to be reviewed. In this case the risk of the enterprise covers the adequacy of the applied IT system, so for example in case of inventory management program:
• all inventory-related transactions were recorded in the program,
• if the program manages value as well, it applies an evaluation process corresponding to the Accounting Law (FIFO, average price),
• whether the program calculates the current amount of inventory.

In this case, the appropriateness of the IT system can be checked with external tests. In case of the inventory management program
• the amount of the closing stock can be calculated in the light of the quantitative data indicated on the incoming and outgoing invoices as well as the opening stock,
• the evaluation can be verified in the light of the purchase prices and the change of the inventory; average price and the FIFO value can be calculated if there is a decrease in the inventory.

The situation is different in case of medium and large-sized businesses. In this case, there are more risks arising:
• whether the selected system meets the provisions of the Hungarian Accounting Act and tax laws,
• the appropriateness of its introduction,
• updating the system: whether the changes in the business processes are lead through the IT system,
• skills of the staff: whether the enterprise has a sufficient number of employees with appropriate knowledge of the system.

If you are unsure whether the system you use meets the statutory requirements, please contact our staff. Based on our experiences in auditing and outsourcing, we can effectively assess the particularities of a system and can make a proposal for the amendments necessary to safe operation.