Is it possible my business will not be audited?

Theoretically it is possible. Tax audits have been targeted more effectively during the past years with the help of data screening. Most often, a tax audit is targeted at the two preceding accounting periods that have been completed. Previously, tax audits were targeted at the five previous accounting periods that had been completed.

Any company can be tax audited

Your company might be tax audited at any time. In most cases, tax authorities do not carry out the audits due to an impulse or a suspected misconduct. Instead, the auditing might be related to the field, changes in the business operations or pure coincidence. Especially large- and medium-sized businesses are in general audited regularly. The tax authorities may perform the audit as a full audit, partial audit or comparison data audit. A full audit means auditing all tax categories, such as business tax, value added tax and prepayment. A partial audit means auditing only some of the above-mentioned tax categories. A comparison data audit collects data for another taxpayer’s taxation purposes.

The taxpayer is generally notified of the tax audit in advance. The notification can be withheld only under special circumstances. A special circumstance might be, for example, a suspicion that the taxpayer is destroying materials.

A tax audit might also help the company

A tax audit is not necessarily only a negative thing. A tax auditor must obey the law, just like a good prosecutor. A tax auditor must also report instances where a company has paid unfounded tax or too much tax. A tax audit might also notice an erroneous practice that the taxpayer has followed for several years. The mistake may have been repeated for several years in a row, but it has not been noticed because the taxpayer assumed that they were following the legislation and regulations. Correcting this mistake during a tax audit benefits the business. The business may be able to avoid the erroneous procedure in the future thanks to the tax audit.