What comes after a tax inspection?
The tax inspection process can be long, but even the most tedious review will come to an end eventually. Let's take a look at how an inspection is closed, when the additionally assessed tax is due, how to defend against the inspection findings, and what else to keep in mind.
As the end of a tax inspection approaches, the report on the inspection findings to date is communicated, usually in the form of an extensive document in which the tax administrator summarises the entire inspection and presents its conclusions. You can comment on the conclusions within the time limit set by the tax administrator, which can be extended upon request. This is usually the last chance in the tax inspection process to try to change the tax administrator's mind.
The tax inspection ends with the delivery of a notice of the end of the tax inspection, accompanied by the tax inspection report. The report, again, describes the course of the inspection and, above all, contains the final assessment of the tax administrator. The text is usually the same as the report on the inspection findings to date, plus the taxpayer's response. If tax is to be assessed based on the tax inspection, the tax amount is quantified in the report. The tax inspection report is undoubtedly one of the most important documents arising from a tax inspection, but it is not a decision in itself, so it cannot be appealed, and its receipt is not decisive for determining the date from which time limits start to run again.
If the tax inspection ends with an additional tax assessment, an order to pay tax must be delivered, usually a supplementary one. The order is usually very brief compared to the tax inspection report: just a new tax calculation with a reference to the tax inspection report as a statement of grounds. The date on which the order is received is crucial for further action, as from this date the 30-day appeal period starts to run. This period cannot be extended upon request. By filing a blank appeal and completing it subsequently at the request of the tax administrator, you will have additional time to prepare your appeal arguments. In addition, you can continue to amend the appeal throughout the appeal period until the appellate authority's decision.
A frequent question at the end of an inspection is "When do we have to pay the tax?" Orders to pay tax contain information on the due dates and the usually confusing notice that filing an appeal has no suspensive effect. If you appeal the findings of the inspection, the tax is not due for the duration of the appeal proceedings, but only becomes payable when the final and conclusive decision is made, i.e., when the appeal proceedings are concluded or no appeal is lodged. Although it is not necessary to pay anything until then, paying the tax additionally assessed before it is due may prevent further interest on late payment.
An additional tax assessment usually involves penalties. We recommend applying for their waiver. The time limit for applying is three months from the date of final and conclusive decision, i.e., again, after the appeal procedure has been completed. It is also possible to apply for a waiver of the penalty even if you decide not to appeal against the additional tax assessment.