What to do when a tax audit or document request letter arrives
The steps a taxpayer should follow from the first day when a tax audit begins or an information and document request letter is received, the taxpayer's rights and a preparation list.
A letter from the tax administration worries most business owners at first. Yet reading the type of letter correctly and getting through the first week in an orderly way often decides the outcome. This article explains, step by step, how to act from the moment you receive an audit or document request letter.
1. Identify the type of letter and its date
| Letter | Meaning |
|---|---|
| Information and document request (TPL 148) | A request for explanation and documents on a specific subject; an audit may not have started |
| Invitation to explain (TPL 370) | The administration has a preliminary finding; a chance to explain before an audit starts |
| Audit letter / request to produce books and documents | A tax inspector has started an audit |
Letters sent by e-Notification are deemed served at the end of the fifth day after they reach your electronic address; deadlines run from that date. To calculate the last day: Deadline and last day
The invitation to explain is subject to separate rules: Invitation to explain and voluntary disclosure
2. Inform your accountant the same day
Send a copy of the letter together with a screenshot showing the date of service. The first job is to establish which tax and period the letter covers and what is requested.
3. Gather the documents
For the period requested, the following are usually needed:
- Journal, ledger and inventory books, or e-Ledger files and their certificates
- Purchase and sales invoices, e-Archive and e-Invoice lists
- Bank account statements, cash records
- Contracts (lease, service, sale), waybills, stock records
- Returns filed and assessment slips
Hand over copies of the documents; if you are asked to hand over originals, get a delivery record.
4. Check the records with your own eyes
If the subject of the audit is clear (e.g. purchases from a particular supplier, a VAT refund, the cash account), that is also where you should look before the inspector does. If there is an inconsistency, document the reason; if there is an error to correct, assess your options with your accountant.
5. Meet the deadline; if you need more time, ask in writing
Failing to produce books and documents on time can lead to the tax base being determined by estimation, the rejection of VAT deductions and heavier penalties. If some documents cannot be prepared in time, request an extension in writing with your reasons.
Your rights during the audit
- Information: you have the right to learn the subject and scope of the audit.
- Minutes: meetings with the inspector are recorded in minutes. Read the minutes before signing; you can add a reservation for parts you disagree with and ask for explanations in your favour to be recorded.
- Representation: your accountant or lawyer can represent you in the process.
- Duration: as a rule, audits are completed within 1 year for full audits and 6 months for other audits; they can be extended with reasons.
After the audit
A tax and penalty notice may be issued on the basis of the audit report. At this stage there are three routes: payment with a penalty reduction, a settlement application or litigation. Options and deadlines: Tax audit and invitation to explain · Settlement request petition · Penalty reduction request
To see the possible penalty in advance: Tax loss penalty
What not to do
- Leaving the letter unanswered within the deadline.
- Trying to file a return with voluntary disclosure after the audit has started: once an audit has started, the voluntary disclosure provisions cannot be used.
- Changing records retrospectively or "completing" documents.
Legal basis: Tax Procedure Law No. 213 arts. 134–141 (tax audit), art. 148 (information requests), art. 30 (estimated assessment), arts. 370–371, art. 376; Regulation on the Procedures and Principles for Tax Audits.