Questions regarding tax audits
January 31, 2022 | 50,00 EUR | answered by Steuerberater Knut Christiansen
The period 2017-2019 will be audited.
(1) Can the tax office expand the audit to earlier years?
(2) If yes, how far back in the past? Which years are still audit-ready? (Tax assessments: 2013-2019: see appendix). 2010-2012 are also available. Are these also audit-ready?
(3) During the audit period, there were invoices where the services provided did not match the invoice. "IT consulting services" were billed, but programming was also done in part. The invoices can be cancelled and new ones created - with a current date. Should invoices issued before 2017 also be corrected? Or is everything time-barred?
(4) What happens to invoices from 2017 that reappear during the cleanup, but were not previously booked?
(5) Some invoices were missing during the audit period, such as invoices for a hardware maintenance contract... There is a written contract, but no recurring invoice. Does it still make sense to obtain an invoice - with a current date referring to 2017-2019?
(6) Are signed tax returns and VAT pre-registration forms prepared by the tax advisor's office also subject to retention requirements and can be requested by the auditor to be presented during the audit?
(7) What does a written procedure mean in the audit? If this is agreed at the beginning of the audit, the auditor must note all findings and queries and present them to the managing director for response?
Thank you.
Good day and thank you for using frag-einen.com!
Regarding your questions, I would like to provide the following feedback as part of an initial consultation:
1) An expansion of the audit to previous years is possible if there is suspicion of tax evasion. However, usually only the audit period announced by the audit order will be evaluated. Any expansion of the audit would also need to be announced in writing beforehand.
2) If an expansion does occur (suspicion of tax evasion), it could cover up to a maximum of 10 years. The statute of limitations for tax evasion is 10 years.
3) Essentially, the question here is whether there is ongoing expenditure in general, or if an intangible asset has been created through programming. In that case, the treatment would already be incorrect because there would be no ongoing expenditure. The intangible asset would need to be written off. Personally, I would wait to see if this is addressed in the audit and then react accordingly. IT consulting could potentially be compared to programming by a layperson. I wouldn't open the door to the auditor right away.
4) Your tax assessments are subject to review. This means that the assessments can be adjusted upwards or downwards by you or the tax office at any time. In case of doubt, you should present these invoices so that they can be taken into account. Especially if the auditor presents facts that increase your income, you could use these previously unconsidered invoices to offset that.
5) Yes, it makes sense to obtain a continuous invoice in this case. If I understand correctly, you provide insurance services or their mediation. Therefore, you are usually not entitled to input tax deduction. Therefore, the continuous invoice would not have any effect on an input tax deduction, but it can be used as an additional document.
6) Signed tax returns do not need to be kept. The auditor usually only uses the copies transmitted to the tax office (electronically). Therefore, there is no need to worry about them requesting copies.
7) In written procedures, there should not be a direct questioning. Instead, any questions should be clarified in writing. Therefore, there is no need to respond immediately to any questions orally.
I hope this answers your questions, but feel free to ask additional questions at no cost.
I would like to remind you that this forum cannot replace a comprehensive and personalized tax consultation, but is primarily intended to provide an initial tax assessment. By adding or omitting relevant information, the legal assessment of your issue could be different.
Best regards,
Knut Christiansen
Tax consultant
