Tax audit

Jan, 25 2020


Professional audit of tax accounting helps to avoid problems with legislation, optimize tax base and make the activity of enterprise more efficient. Companies with multi-level structure, including holding companies, especially need tax audit. This service is also popular among companies with extensive network of branches, among medium and small businesses.

It is important to carry out audit on time, since overpayment is refunded not later than three years after transaction is made, so it is important to file a timely tax request. Also, tax audit should be carried out when chief accountant or specialist is responsible for payments and declarations changes.

The main goal of any tax audit is a qualified check of all financial documents of enterprise for compliance with current legislation. Violations can occur not only through fault of staff accountants, but also because of frequent amendments to tax legislation.

When a tax audit is required

Putting in order reports before inspection eliminates problems with public bodies, it is necessary in order to avoid penalties. If a company identifies surplus in tax payments or state tax, it can expect a refund. This makes regular tax audit even more beneficial.

In addition, check is also needed if client is planning to acquire any other company or part of it. To do this, assessment is made of either all risks or risks in certain direction of a company that is listed for sale.

Types of tax audit

Preliminary checks of tax reporting are divided into three types:

  • comprehensive;
  • focused;
  • structural.

Comprehensive audit involves an extensive review of all tax reporting for a period of one year. It requires more time from performer and financial costs from client. A comprehensive tax audit will be required prior the planned inspection by the Tax office. It also allows to identify cost trends and develop a system for their optimization.

Focused audit is analysis of certain type of tax documents for selected period. Such audit allows to deepen into details of reporting, find weaknesses. Usually it is carried out much more quickly than comprehensive audit.

During structural audit, declarations are checked separately for each tax that client pays at location of company’s divisions. This type of tax audit is best suited for enterprises with extensive structure. It allows to cover the entire taxation system of enterprise, compare tax burden on divisions and balance it.

Also, there can be separately distinguished services of express audit. This is quick examination of all tax reporting carried out in a short time. This type of audit is useful if there is no time for comprehensive audit, but the focused audit is not enough because more information needs to be analyzed.

Tax audit methodology

Audit of tax liabilities is carried out in two stages: firstly, existing taxation system and examination of tax deductions correctness to budget and non-budget funds are evaluated. Checking tax payments involves analysis of VAT tax returns, income tax returns, statements on advance payments, personal income taxes, etc. Based on results of this stage, specialists make conclusions about tax structure, correct systemic flaws , and propose optimization options.

Tax audit includes:

  • checking your tax liability;
  • assessment of current method of optimizing tax base effectiveness;
  • recommendations for reducing tax base;
  • preparation for inspections by tax authorities.

Contact VALEN to minimize tax risks. You can order a tax audit service by calling us at our office phone number +7 (495) 7-888-096 or making an appointment in our office.

Author of the article
Tax audit
Valentina Khlavich
Managing Partner
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