Tax audit: rights and obligations of the company

Tax audit: rights and obligations of the company

Introduction

Tax audit is a step feared by many managers, but largely manageable when you know your rights and obligations. Supervised by the Book of Tax Procedures (LPF), it allows the administration to verify the accuracy of declarations submitted by companies in terms of corporate tax, VAT, CFE or even CVAE. Faced with the rise in control of documents and the generalization of data mining via the CFVR system (Targeting Fraud and Valorization of Requests), all companies must anticipate and structure their tax documentation. This article details the different forms of control, the guarantees offered to the taxpayer and the good practices to adopt to secure your taxation.

The different forms of tax controlThe administration has several tools at its disposal. Thedocument control ⬥⬥⬥, provided for in articles L. 10 et seq. of the LPF, is carried out from the auditor's offices, based on the declarations and documents already transmitted. Theaccounting audit(article L. 13 of the LPF) takes place in principle on the company's premises and covers all accounting operations. Theaccounting examination(article L. 13 G of the LPF), introduced in 2017, allows remote control of the Accounting Entries File (FEC). Finally, thespot checkspot check

targets a limited fee or period.

Each procedure obeys strict rules: sending a verification notice, reasonable preparation time (15 days minimum recommended), maximum duration of three months for SMEs falling under the simplified regime (article L. 52 of the LPF).

The rights of the verified taxpayerThe audited company benefits from substantial guarantees. The verification notice must mention theCharter of rights and obligations of the verified taxpayer ⬥⬥⬥, enforceable against the administration. The manager can be assisted by the advisor of his choice (accountant, tax lawyer), a right whose disregard results in the nullity of the procedure.

Theoral and contradictory debateis obligatory throughout the on-site verification. At the end of the inspection, a proposal for rectification (form No. 2120) must be justified in law and in fact (article L. 57 of the LPF). The company then has30 days ⬥⬥⬥, extendable for an additional 30 days on request, to formulate its observations.In the event of persistent disagreement, several remedies exist: referral to the hierarchical superior, the departmental contact, the Departmental Commission for Direct Taxes and Turnover Taxes, then litigation before the administrative court.

The company's obligations

The company's obligations

The company must keep its accounting documents and supporting documents for6 years(article L. 102 B of the LPF), or even 10 years for social documents. Since 2014, submission of theAccounting Entries File (FEC)in electronic format is mandatory upon opening of the audit (article L. 47 A of the LPF); a non-compliant FEC exposes you to a fine of €5,000 or 10% of the duties recalled.

The obligation to cooperate implies responding loyally to requests, without going beyond the legal scope. Companies with a turnover of more than €400 million must also keepdocumentation of transfer prices(article L. 13 AA of the LPF).

Conclusion

Mastering the rules of tax control means transforming a constraint into a security lever. Rigorous documentation, a compliant FEC and support from experienced advice can considerably limit recalls and penalties. Anticipating also means knowing how to activate spontaneous regularization or tax ruling systems to secure sensitive positions upstream.