Understanding the Tax Audit Process
A tax audit is the official review process used by tax authorities to verify the accuracy of a taxpayer’s filings and determine tax obligations of both individuals and businesses, based on criteria set by the Tax Administration. Being selected for a tax audit does not automatically imply wrongdoing; audits are a normal part of tax oversight.
Given that the majority of state revenue derives from direct and indirect taxation, tax audits serve as a control mechanism designed to determine and collect outstanding taxes.
What a Tax Audit Involves
At en-taxis, in collaboration with experienced lawyers specializing in tax law, we provide comprehensive support to individuals and legal entities managing issues that may arise during a tax audit. These audits may be conducted by various competent authorities, such as the Financial Crime Unit (S.D.O.E.), the Audit Centers for Large Wealth (K.E.FO.ME.P.) or Large Enterprises (K.E.ME.EP.), the Internal Affairs Directorate (Y.E.D.D.E.), and local Tax Offices (D.O.Y.).
The auditing authorities utilize, among other means:
- Exhaustive examination of accounting books and tax records.
- Accessing bank records and reviewing account activity.
- Sharing information with financial institutions and, where necessary, foreign tax authorities.
- Application of indirect audit methods, such as liquidity analysis, net worth checks, and correlating turnover with bank deposits and cash expenditures.
- Investigation for the issuance or receipt of fictitious (virtual) tax elements.
Our Approach: Experience & Strategy
With 40 years of experience handling tax audits, en-taxis delivers experienced guidance and strategic support tailored to each case.
- End-to-End Support: From the initial notification to the issuance of final acts, we provide personalized guidance and practical support, taking into account the unique characteristics of each case to ensure proper handling.
- Legal & Administrative Appeals: Upon completion of the audit, if final tax assessment acts are issued, we – in cooperation with specialized tax lawyers – undertake the drafting and filing of administrative appeals before the Dispute Resolution Directorate (D.E.D.) if the taxpayer disputes the assessed amounts.
- Proactive Protection: Parallel to active defense, we offer preventive consulting services. We help you design a correct tax strategy to reduce the probability of future audits through effective Tax Risk Management.
Key Services
- Audit Support: Comprehensive support throughout audits and resolution of outstanding tax issues.
- Specialized Individual Taxation: Management of complex tax issues for individuals.
- Advisory Throughout the Process: Continuous tax and consulting services during the entire audit duration.
- Legal Representation: Legal assistance (in corporation with with specialized tax lawyers) for complex tax disputes, from advisory support to formal appeals.
- Administrative Appeals: Drafting and filing of appeals before the Dispute Resolution Directorate (D.E.D.).
- Preventive Audits: Conducting internal preventive tax audits to identify risks early.
- International Tax Planning: Tax design for foreign tax residents.
- Bank Deposit Checks: Auditing and justification of bank deposits.
- Transfer Pricing: Tax audit of intra-group transactions and transfer pricing documentation.