what Tax audit and triggers?
In the interest of productivity, the tax administration is constantly looking for ways to increase its revenue. One of the solutions available to it is to strengthen tax controls, both for individuals and companies. The professional tax audit is generally the one with the heaviest consequences. As a business owner, you should know that certain elements are likely to alert the tax services and be at the origin of a tax audit.
Compliance with reporting obligations
The day-to-day management of a business necessarily involves discussions with the tax authorities and compliance with the obligations incumbent on it. Indeed, France is based on a declaration system under which taxpayers are required to complete the tax declarations which concern them and to send them to the tax authorities.
A relationship of trust is thus established between the tax authorities and the citizens. The declarations made are thus deemed to be correct until proven otherwise. The absence of a declaration, therefore, breaks this relationship and could therefore be the source of investigations by the tax services.
How to minimize the risks of tax audits?
The tax audit can be random or else carried out following elements likely to alert the tax administration. As a business owner, you must be aware of this in order to make all the necessary precautions to prevent a tax audit.
Your activity means that you may have to subcontract certain operations. The IT resources made available to the tax services make it possible to cross-check and highlight discrepancies between the declarations made by the various professionals.
Likewise, tax audits and URSSAF can sometimes be linked. The clandestine work is for example often means revenue undeclared. The URSSAF services which observe the presence of undeclared workers should in principle inform the tax administration services.
Tax audits may also result from factors beyond your control. Certain sectors can sometimes be directly affected by national or local directives.
Cascading controls, exchanges of information between departments, absence of declarations, or even directives, can therefore be at the origin of the tax administration’s investigations. Different types of control may then be carried out.
The different types of control
Companies in the viewfinder of the tax administration may be subject to documentary control, an accounting audit, or an accounting examination. If the document control is simply intended to allow the administration to verify the accuracy of the declarations made (which may give rise to a request for information or clarification), the verification and examination of the accounts are procedures that give rise to information from the company manager. The accounting audit will be the most intrusive procedure as it will take place on the company’s premises. The goal of the tax administration will be in particular to cross-check all the declared elements: the number of charges, turnover, income tax, corporation tax, VAT, etc.
In order to avoid the disproportion of the forces present, it is important for the business manager to be accompanied by a legal professional who will be able to guarantee compliance with the procedure and defend his interests. Poor management of the professional tax audit can generate an examination of the personal tax situation in certain cases, or generate personal financial consequences on the head of the manager or manager of the audited company (correction proposal drawing the consequences of the accounting audit).
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