The term “tax audit” is enough to make many entrepreneurs break out a cold sweat, and rightfully so. It can be a lengthy, demanding, and costly process. However, there are several fundamental principles that, when implemented, can significantly improve your starting position at the beginning of a tax audit. Below, we have prepared an overview of three basic tips that can make your prospects of success in a tax audit in Slovakia much more positive.

1. Trust, but verify

• Has tax and/or contribution arrears;
• Has a zero VAT obligation listed in the public register, despite issuing invoices to you, or you issuing invoices to them;
• Provides a bank account not listed in the partner’s accounts on the website of the Financial Directorate of SR;
• The managing director of a business entity is listed in the Commercial Register in an unreasonably large number of other companies;
• The supplier operates in an industry regulated by special legislation and cannot be found in the public register of the relevant institution, or cannot provide you with permission for this activity (e.g., lists of tax advisors, auditors, lawyers, as well as temporary employment agencies, and many others);
• You do not communicate with or have never met the managing director, only with an intermediary;
• Is unwilling to sign a contract, negotiates business terms only over the phone without confirming anything in writing;
• Is unwilling to provide you with a KYC declaration, etc.

Although verifying business partners in this way during daily activities may seem laborious and time-consuming, by setting up internal processes correctly, you can save much more trouble and potential problems in the long run than the current time investment in verification represents. Prioritize protecting your business and try to avoid suspicious entities that could involve you in fraudulent schemes without your knowledge.

2. Fortune favours the prepared

Literally. When you receive the dreaded notice of a tax audit, the audited entity usually doesn’t have much time and must act promptly. The notification of a tax audit must include the start date of the audit, and if this date doesn’t suit you, you need to agree on a different date with the tax administrator within 8 days. However, the tax audit must start no later than 40 days after the notification is delivered.

At the same time, the tax administrator specifies in the notification which documents and records they require from the audited entity. Usually, even in simpler audits, these lists are extensive, and many transactions require supporting documents, such as contracts, orders, payment confirmations, etc. If you don’t have these documents prepared and organized on an ongoing basis and need to gather them within a relatively short period and for a period spanning several years while your business continues to operate normally, it can be very challenging. For this reason, do not underestimate the ongoing preparation and archiving of documents so that you always have them readily available.

3. Communication is key

You can have a good relationship with the tax administrator, and like in any relationship, communication is the key. Set up electronic mailboxes, pick up your mail, respond to requests in writing, by phone, or via email. In a tax audit, it is particularly important not to be passive but to actively inquire about the steps the tax administrator is taking and the direction of their considerations after you have submitted documents. Based on this, you can effectively defend yourself and present documents and evidence that will help you prove your claims. At the same time, you won’t waste time preparing documents that will be irrelevant to the tax administrator. If you are apprehensive about communicating with the tax administrator, engage a tax advisor to help you communicate effectively with them.

As you may have deduced from these tips, a significant part of success in a tax audit is achieved long before the tax administrator sends you a notice of its commencement. If you are not prepared, after the start of the tax audit, you are left scrambling to hastily gather evidence, exposing yourself to the risk of unnecessary tax adjustments.

If you are interested in setting up control processes tailored to your company, so that a possible future tax audit does not catch you off guard, we would be glad to offer you our consulting services. Our experience in the field of tax audits will help you identify and reveal weak spots in your processes, and our specific measures will help you reduce the risk of negative findings in the tax audit process. If you find this interesting, do not hesitate to contact us at .

Barbora Juhásová

Tax Manager | Accace Slovakia

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Phone : 

+421 232 553 000

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