Tips and tricks
What evidence to keep should tax authority come knocking?
By the time the tax authority arrives, it may be too late to think about what documents the taxpayer should have kept. Hence, let's look at the specific evidence that the tax authority may require during various tax inspections, as there are…
When does burden of proof lie with tax authority?
The tax authorities often put taxpayers in the position of having to prove the overall accuracy of the tax reported in their tax returns. The burden of proof is generally on the taxpayer, but in certain cases it can rest on the tax authority instead…
How to present evidence in tax proceedings, or: less is sometimes more
Many of you have no doubt encountered a request for evidence during a tax inspection. However, being overzealous in providing evidence may not always pay off. What specific evidence a taxpayer is required to produce at each stage of a tax…
Who bears the burden of proof in tax proceedings and why is it important to know?
The questions of who bears the burden of proof in tax proceedings and when has plagued many a taxpayer and even tax administrators. The burden of proof is distributed between them and during tax proceedings usually shifts from one to the other. The…
Information obligation: what question may tax officers ask?
The tax authorities often call upon taxpayers – both formally and informally – to provide them with information or documents. While the information obligation towards the tax administrator is rather extensive, it does have its limits. Sometimes,…
When do penalties for additional tax returns arise? How to avoid them?
Generally, no penalty arises if the incorrectly paid tax is corrected in an additional tax return. Unfortunately, the amendment to the Tax Procedure Code effective from 1 January 2021 gives rise to situations where an additional tax return can lead…
Need more time to respond to tax authorities? Apply for deadline extension
Imagine a tax administrator's notice arrives in your data box. The deadline is insufficient, and you are rightly concerned that you will not be able to prepare your standpoint and collect the necessary documents in time. The Tax Procedure Code takes…
Minimising sanctions: other options to reduce default interest
As a sanction associated with an additionally assessed tax, default interest can often be more severe than a penalty. Default interest waiver options, discussed in the previous issue of the Tax and Legal Update, are very limited where tax…
Minimising penalties: how to claim a default interest waiver?
The January amendment to the Tax Procedure Code has brought relatively significant changes to default interest, introducing a single default interest rate for both tax administrators and taxpayers of 8% + repo rate. However, taxpayers have tools at…
Minimising penalties - how to claim a waiver?
Depending on the results of a tax inspection, a penalty of 20% of the additionally assessed tax or 1% of the amount by which a tax loss was reduced may become due. This amount is fixed, and cannot be reduced by tax administrators on their own.…
How to minimise additional tax assessment sanctions?
The conclusion of a tax inspection resulting in an additional tax assessment is associated with sanctions: a penalty plus default interest; the latter, while technically not a sanction, may be many times higher than the penalty. The Tax Procedure…
Initiation and termination of tax inspections after amendment to Tax Procedure Code
The Tax Procedure Code has been amended, with changes already effective since 1 January 2021. How has the amendment affected tax inspections, in particular their initiation and termination? One positive aspect is that it will definitely help…