Desk audit (in-house tax control) is one of the key forms of remote tax administration, conducted by state revenue authorities without visiting the taxpayer's premises.
The primary objective of this control is to provide taxpayers with the opportunity to independently rectify identified non-compliances, accurately calculate taxes, and avoid administrative liability.
Procedure for Conducting a Desk Audit
- Automated Data Reconciliation: Control is exercised by analyzing tax returns, electronic invoices (E-Invoices), as well as data received from the information systems of other government agencies.
- Audit Period: The audit is conducted for past tax periods after the taxpayer has submitted the respective tax reporting.
- Statute of Limitations: The procedure is carried out strictly within the statute of limitations established by law for the corresponding period.
Taxpayer Actions Upon Receipt of a Notification
If discrepancies are identified during the automated analysis, a Notification on Rectification of Violations is issued to the taxpayer. The legislation provides two options for execution:
- In Case of Agreement with the Identified Discrepancies:
The taxpayer submits an additional tax return with corrections, pays the due taxes and accrued interest (penalties), after which the data is reflected in the system. - In Case of Disagreement with the Identified Discrepancies:
The taxpayer submits a reasoned explanation to the state revenue authority. Documents confirming the validity of their position and the declared indicators must be attached to the explanation.
Note: State revenue authorities are not entitled to demand documents that are not directly relevant to the discrepancies identified in the notification.
Cases Where an Explanation Is Not Accepted
A taxpayer's explanation is not recognized as execution of the notification if the violations are related to:
- Transactions that have been legally declared invalid by a court.
- Operations where works were not actually performed, services were not rendered, or goods were not supplied (sham or fictitious transactions).
Consequences of Non-Execution of the Notification Within the Prescribed Deadline
Disregarding a desk audit notification entails the application of enforcement measures by the state:
- Account Restrictions: Suspension of debit operations on the taxpayer's bank accounts.
- Resource Blocking: Restriction of access to internet resources (applicable to foreign companies).
- Suspension of E-Invoice Issuance: Suspension of the ability to issue electronic invoices, which effectively makes further commercial activity impossible.