As is known, in accordance with the existing order, the authorities are required to publish a plan for tax audits for the coming year. In particular, the Tax Committee of the Ministry of Finance has developed and officially published the Plan of complex tax audit for the first half of 2012.It is known that there are factors such as the lack of certainty of tax laws, sometimes aggressive approach of the tax authorities in the audit, as well as frequent low level of skills and knowledge of a person checking on some issues.
In such cases, in tax inspection, companies may have significant risks of additional charges for taxes. In addition to the tax charges, one applies administrative fines (up to 50% of the additional charges) and charges as sanction. In addition, for tax offenses, administrative detention for 45 days and the confiscation of property of the taxpayer in the amount of additional charges is also possible. There are ways to reduce the risks of tax audits. We want to remind you that if you find your company in the audit plan, so based on the current practice, the most effective ways to reduce risk are:
1. Preliminary tax audit (review) by independent consultants before the tax audit. This method allows you to eliminate all possible violations in advance by providing additional returns, tax surcharges (if required), and preparation of supporting documentation, in case of absence, and so on.
2. Support of a tax audit by consultants and assistance in preparing the complaint on its results, including continued support of the complaint with the tax authorities. In case of controversial issues, it is possible to eliminate or minimize the risks of tax by negotiation with auditors. Negotiations are held by consultants in the course of the audit with the use of appropriate arguments based on the applicable law.
3. Assistance of consultants in the preparation of the claim and support in the lawsuit. Qualified legal assistance is essential not only for the current controversial tax issue, but also due to the fact that a decision or a court order is of mandatory (prejudicial) value for taxpayers in similar cases in the event of future litigation. Accordingly, in some cases, there is a risk that the unfavorable position of the tax authority would adversely affect subsequent tax years. As practice shows, the assistance of lawyers and consultants enables to properly and clearly formulate the position of the taxpayer in the proceedings, to prepare evidentiary basis sufficient to protect its rights and interests. If the company has a margin of time, the first method is the most appropriate and effective, as only this method ensures the best effect of minimizing tax risks at the lowest cost.
If the company does not have sufficient time to conduct a tax audit (review), the next most effective way to reduce the assessed taxes is the assistance and further appeal to a higher tax authority and / or a court. We also would like to remind of the basic terms that exist in the process of appealing the results of a tax audit. Knowing these terms will properly and effectively plan the appeal process.
• A complaint to the higher tax authority must be submitted within 30 working days from the date specified in the notification.
• After receiving permission from the higher tax authority, the taxpayer may appeal to the authorized body (the Tax Committee of the Ministry of Finance) within 30 working days upon receipt of the decision of the higher tax authority.
• To suspend consideration of the administrative proceedings (fine) the appropriate motion to postpone consideration of the case must be submitted to the Administrative Court immediately after the receipt of the administrative breach by a judge or the tax authority, depending on the agency which the case was transferred to.
• A claim to a court on appealing the results of the tax audit may be submitted within 3 months from the date of receipt of the notification or, if it is appealed, after receiving the decision of the higher tax authority or of the authorized body on appeal.
• Trial court’s decision can be appealed to the Court of Appeal within 15 calendar days from the date of its delivery.
• An order of the Court of Appeal may be appealed to the Court of
Cassation within 15 calendar days from the date of delivery of the order (in accordance with the proposed changes, the period for appeal may be extended up to 6 months).
• Appeal to the Supervisory Board of the Supreme Court of the Republic of Kazakhstan may be exercised within one year from the effective date of the decision (order) of the court. In conclusion, I would like to note that the process of audit can be a long and time-consuming process that would require resources. Therefore, as soon as one is aware of the impending tax audit, it is necessary to develop a plan of actions. Readiness of a company plays a crucial role in the successful completion of the tax audit.
