A tax audit is a service that involves checking the accuracy of a client’s tax returns. It is often comprehensive in nature, covering a range of taxes and several tax years. However, it may be carried out solely in relation to annual corporation tax or selected VAT accounting periods, or it may take the form of an analysis of a specific issue, such as the correct application of a tax relief or the
As part of a tax audit:
- we check the tax calculation,
- we verify that tax returns have been filed on time and correctly,
- we review source documents (invoices, contracts, payroll records, etc.),
- we examine entries in the tax records (accounting books, fixed asset registers, VAT registers, etc.),
- we address clients’ queries on an ongoing basis,
- we identify tax issues and suggest safe solutions,
- we recommend changes to existing tax procedures to minimise tax risk,
- we summarise the results of the analysis and our recommendations in a report.
Audit report
Each tax audit concludes with a report which describes the irregularities identified and sets out our recommendations for further action, aimed at rectifying the irregularities and mitigating tax risks.
Due Diligence
As part of their business operations, many companies undergo restructuring, mergers or demergers into other business entities. In such circumstances, a due diligence review of the entity that may be the subject of an acquisition proves helpful. We offer advice in this area to Polish and foreign investors planning to acquire shares in a company, a business or an organised part thereof, as well as those interested in acquiring property or entering into other transactions, who wish to ascertain the actual tax position of the entity in question.
As part of a tax due diligence review:
- we assess the accuracy of tax returns across all areas of taxation or in respect of selected taxes, covering longer time periods (e.g. the 5-year tax limitation period) or only the periods specified by the client,
- we examine the number and outcomes of tax and social security audits carried out,
- we verify the amount of state aid utilised and subsidies received,
- we analyse the status of outstanding liabilities to the tax authorities and the Social Insurance Institution (ZUS),
- we verify ongoing proceedings before tax authorities and administrative courts in tax matters which may result in an obligation to pay additional tax,
- we review contracts with business partners for potential tax risks,
- we identify and highlight areas of tax risk based on a review of the documents provided.
Due Diligence Report
As with a tax audit, following the completion of tax due diligence, we prepare a report in which we set out the irregularities identified, highlighting the tax risks and, where possible, quantifying them. It is up to the client to decide on the next steps based on this report.