December 4, 2017

Knowing the investigation and control procedures used in tax inspections, you can be prepared in optimal conditions for tax inspection.

We spoke in a past article about the fact that, before starting the investigation on the ground, i.e. during the period from the submission of the tax inspection notice to the date on which it is carried out, the tax inspectors proceed to the documentary analysis of the dossier selected for the control.

After the completion of this stage follows the development of the interventions on the ground, the most important part of the fiscal inspection and which has 4 approaches, respectively:

legal approach
economic approach
financial approach
accounting approach
1. Legal approach
In the context of tax control operations, regardless of the nature of the company, the legal information resulting from the documents providing identification elements of taxpayers paying taxes, taxes and contributions will be checked, namely:

1. the constituent act of the company;
2. the certificate of registration with the Trade Register which also includes the unique registration code and extracts;
3. annexes to the registration certificate for the registered office and secondary offices, as appropriate, on proof of legal detention of the space;
4. title to the property where the place of business is declared; rental contract; commoditization contract;
5. proof of contribution;
6. tax registration declaration, representing the tax vector on taxes, taxes and contributions due by the taxpayer.

Documents useful in obtaining legal information

In addition to the documents presented above, will be checked: contracts with suppliers and clients, minutes of general meeting of associates (shareholders), board of directors, executive management, reports of the audit committee, audit reports, other documents.

Neural points

1. the statutory changes regarding their content, the existence of possible fiscal consequences of the statutory changes are taken into account;
2. total or partial change of activity;
3. change of the tax regime to favour the taxpayer over the state;
4. check the change in the legal form by the appearance of a new legal person leading to the change of the tax regime (possibly mergers, divisions or associations through which the taxable mass can be hidden);
5. time analysis of the administrative management of a company, through the prism of executive administrations and management, can provide useful information in terms of privileged commercial relations with other companies or individuals with whom they have been or are in contact with interest.

Economic approach
Objectives envisaged are the following:

A. field of activity:

1. if the main activity declared and authorized in the act of formation of a company is entered in the registration certificate and is the predominant activity that the company carries out;
2. check the ancillary activities carried out and whether they are entered in the act of incorporation or in applications for registration mentions of the object of activity of the company;
3. knowledge of the activity of the verified taxpayer.

BIG WARNING! The lack or incomplete declaration of the activities that the company carries out can constitute an “escape” with extremely large adverse consequences in the sense that the tax inspection bodies can proceed to confiscation of the amounts of money and property acquired by committing the contravention, respectiv desfasurarea activitatilor fara a fi declarate sau autorizate (vezi art. 3 din Legea nr. 12/1990 republicata privind protejarea populatiei impotriva unor activitati de productie, comert sau prestari de servicii ilicite).

B. the marketing methods, having regard to compliance with the provisions of OG no. Article 99/2000 on the marketing of products and services.

From this spectrum will be analyzed all sales with reduced price, namely: liquidation sales, sales of sales, sales made in sales structures called factory store or factory warehouse, promotional sales, etc.

Attention! It is forbidden for any trader to offer or sell products at a loss, as well as in the case of products in packages of services. By sale at a loss, any sale at a price equal to or less than the cost of acquisition, as defined in the legal regulations in force.

1. The so-called “prohibited commercial practices” will also be checked and analysed by the tax authorities. Last but not least, the tax inspection bodies also follow the rules of marketing of products and services.

In order to avoid any inconvenience on the part of the tax authorities, we recommend the inclusion of these procedures in the Manual of Accounting Policies, regulated by the Order of the Ministry of Finance No. 1802/2014.

C. staff employed and risk of black work: declaration of lower wage income than those actually paid;

D. if the field of activity in which the verified taxpayer operates is on the rise or in recession.

3. Financial approach

An important role is the analysis on financing and financial investments, respectively the analysis of the taxpayer’s financial flows. In this respect, the following aspects are followed:

1. it starts from the analysis of the contribution to the share capital and its structure:
2. in nature
3. cash (national or foreign currency);
4. if there is sufficient social capital to finance the activity;
5. if there are loans granted by associates/shareholders and/or third parties to the taxpayer verified with justification of its provenance;
6. if there are loans from credit institutions, the deadline for granting them and if the destination for which they were granted has been respected;
7. if the loans contracted are in lei or in foreign currency;
   if the company has financial investments to third parties;
   if the company made advance payments to suppliers and were made on the basis of contracts.

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