Tax audit I.

The main purposes of State Tax Authority audits in 2012 are the promotion of volunteer compliance with law, prevention, dissolution and sanctioning of intentional violation of liabilities. On behalf of this, the department of State Tax Authority dealing with tax and customs puts the application of new methods forward in its audit activity, through which unfair taxpayers can be filtered, the potential scope of taxpayers can be explored, the factual scope of taxpayers can be expended.

It is a strategic aim that the audit shall be focused on taxpayers bearing significant risk and that the State Tax Authority shall be present continually with great forces in the frequently concerned fields of taxation.

Similarly to the previous years, the focus of risk analyses and selection providing basis for tax audits are on the one hand the risk factors connecting to the different periods of taxpayer’s records (formation, operation, transformation, termination) and on the other hand the risky taxpayer relationships.

Taxpayers primarily involved in tax audits:

a) taxpayer with great turnover, carrying significant risk,

b) the transactions with invoicing round, marketing chaining, participants of “invoice factories”,

c) tax mineralisers,

d) enterprises participating in organised fraud constructions disclosed by risk analysis,

e) enterprises concerned in car and other vehicle rental.

The main activities to be audited in the service provider sector in 2012:

– large-scale trade (especially the agential large-scale trade of agricultural product, the large-scale trade of grain, forage, living animal and meat, product made of meat);
– road transport of products;
– storage;
– hospitality;
– work force market services;
– security, investigatory activity;
– other personal services.

It can be stated by personal experiences that it is highly important to have a very detailed documentation of transactions by tax audit. For example, by tax audits before VAT allocation, the invoices of export sales and sales within the EU, the connecting documents certifying completely the exits in case of all invoices.

It is typical that previously it was enough to orally report on the activities of the company, to inform the auditors, now the company shall give a detailed written description, in certain cases illustrated by a specific example (how is the procedure from the order till the sale by the company).

Source: www.nav.gov.hu – Areas of focus for tax audits in 2012