What to do after receiving a notice
Once you have received a notice of intent to initiate an audit, you should check its contents immediately. The most important details are the scope of the audit (type of tax and period), the designated authority and the start date. The audit may commence no earlier than seven days and no later than thirty days after the notice is served — you should use this time to prepare.
The first step is to carry out a self-audit of your accounts. You should review your tax returns and books for the period covered by the audit, check the consistency of the data, and compare the figures from your VAT and JPK records with your tax returns. If errors or discrepancies arise, it is worth considering making a subsequent correction and paying the tax due with interest. Once the audit has commenced, the possibility of making corrections for the relevant period is suspended.
At the same time, an internal action plan should be established – who is responsible for liaising with the auditors, who prepares the documents and by when. It is worth creating a simple schedule: receiving correspondence, compiling materials, submitting the requested documents and recording correspondence.
How to prepare documentation
The business owner should gather all tax and accounting documentation for the period covered by the audit. The basic materials include: accounting ledgers or the revenue and expense ledger (PKPiR), VAT records, sales and purchase registers, tax returns and JPK files. In addition, invoices, bills, bank statements, cash reports, commercial contracts, payrolls, civil law contracts and fixed asset registers.
It is worth organising everything chronologically and by subject – in separate binders or electronic folders. Documents in foreign languages will likely need to be translated, and electronic data should be checked for correct formatting and exportability. A good solution is to prepare an audit file, i.e. a set of key documents that are most likely to be requested by the tax authority first (e.g. VAT registration confirmation).
One must not forget internal documents, such as accounting policies, procedures (e.g. VAT due diligence, WHT, MDR, etc.), regulations or administrative decisions relating to the business. It is also worth preparing supporting statements – e.g. summaries of transactions with counterparties or turnover and balance reports – as this will facilitate a quick response to the inspectors’ questions.
After the audit
Once the audit procedures have been completed, the business owner receives an audit report. This should be read carefully and compared with the documentation on hand. If the findings are incorrect or incomplete, objections may be lodged in writing within fourteen days, accompanied by supporting evidence. It is worth responding, as the absence of objections is deemed to constitute acceptance of the findings contained in the report.
If the audit has revealed errors which the business owner considers to be justified, then a corrected return must be submitted and the outstanding tax paid, together with interest. In many cases, this allows the matter to be resolved without the need for tax proceedings. The report, objections and all correspondence should then be archived and kept alongside the accounting records.
A well-prepared tax audit proceeds smoothly and without unnecessary complications. The key lies in well-organised documentation, clear work organisation and a swift response to the authority’s requests. The less chaos there is in the documents and communication, the shorter and less problematic the audit will be.
The practice includes ongoing advice on administrative and tax law. He has extensive experience in handling judicial, administrative, tax and judicial-administrative proceedings concerning both individual clients and business entities, including that gained through many years of providing services to local government units and other units of the public finance sector.
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