Tax inspections: Does Faster Mean Better?

Aleksandra KORZEŃ
Accounting Manager at RSM Poland

With the new digital age technologies, accounting office staff gradually got used to e-mail communication, relying on scanned documents and having more casual connections with tax office staff. The pandemic that has made working from home so popular and has also greatly streamlined the information exchange between accountants and clerks. However, does that mean that digitisation itself is enough to solve all the accounting problems?

Accounting job yesterday…

Over the years of my outsourced accounting experiences, I have handled dozens of tax summons. As an Accounting Manager, I deal with VAT and income taxes on a daily basis, and I am leading a team of professionals who keep our clients’ books in such a way so as to ensure that any settlements are absolutely correct and any reporting to the authorities is carried out in a timely manner.

Owing to this, I had a chance to see how contacts with clerks have evolved, along with both the approach of the state authorities to the taxpayer and cooperation with us, accountants from dedicated consultancy companies. Many of our clients take up activities that require more than just finance and accounting expertise, but also cooperation with relevant authorities, for example, they apply for VAT refunds, request to have overpayments credited against their liabilities or apply for the payment of their liabilities in instalments. Usually, any such activity involves a relevant clerk contacting the person representing the company. Thus, while performing outsourced accounting services at RSM Poland, we receive tax summons or requests for additional documents. Sometimes a list of requirements takes up several A4 pages.

It is easy to guess that phone calls to our office or even personal visits of tax office staff never came as a great surprise to our employees. In order to perform our duties with due accuracy and respond to clients’ needs, we copied dozens of invoices and other documents only to take them to the tax office or send them by snail mail in order to prove that the accounts have been correct and to convince the authorities that a given company is entitled to a tax refund. Every single copy of a document had to be certified as a true copy by an authorised person, which was troublesome and made the entire procedure much longer.

With the progress of digital technology, those days are over, fortunately.

…and accounting in the era of present-day online communication

The pandemic has moved us even further into the virtual world, and we notice that many taxpayers, who do not contact public offices directly themselves, are convinced that communication with tax authorities is actually simple and does not involve any great work load, stress or risk. Such people think that either a fast response to an email requesting a number of documents or a lengthy response to a phone call requesting document delivery should allow them to receive their tax refund or an expected tax decision quickly and easily. Unfortunately, they could not be more wrong.

Most our clients report to specialised tax offices dedicated to companies with foreign capital that tend to have many millions in revenue, hence they face many additional legal requirements.

Thus, as much as we have taken a step forward in Poland when it comes to going digital in data delivery and communication with state administration bodies, there are still many regulations, among others those included in the Tax Ordinance, that have remained unchanged for years. And even though many clerks are trying to do things on their own to make the process easier and faster by requesting the information (sometimes very important) to be sent via ordinary e-mail, this is not always good for the taxpayer.

Therefore, we continue to recommend our clients to rely on written, official correspondence with the authorities. The reason behind it is that the legislator has decided that any verification shall be limited to a formal check of data and document compliance; this procedure, however, does not allow the tax authorities to take evidence. A taxpayer who is not a party to any tax proceeding or inspection cannot have any access to files nor express any opinion on the documentation and information gathered by the authorities.

Professional outsourcing guarantees security

Experienced accountants are usually in a position to accurately assess whether there are any legal grounds in a particular business situation that, as part of a tax investigation, would entitle the tax authorities to request a given taxpayer to present all kinds of agreements, explanations and payment confirmations; obviously, if the documents are in a foreign language, you would have to provide translations into Polish.

With a large number of regulations and the nature of methods used by the Polish state administration bodies, sometimes you cannot do without an experienced tax advisor who will help you prepare a professional written response to the tax summons or, owing to their knowledge of the Tax Ordinance, a relevant justification of data and accounts included in your documents, if you want to get what you want, namely have the thing sorted out the way that is good for you.