What is a tax audit?
A tax audit is used in the field of public law as a synonym of tax inspectorate. It is defined as a method or technique aimed to verify and analyze cases related to acts of fiscal nature. In other words, through this audit, there is control and inspection of the fiscal status of both natural and legal persons.
Tax audits aim to verify if the taxpayer complies with its fiscal obligations or not.
analyzes and evaluates:
- Accounting records.
- Daily turnovers.
- Documentation with information regarding the operations carried out.
*Periods in fiscal terms are annual.
Principal objectives of a tax audit:
- Ascertain that the balances of the liability side of the balance sheet correspond to the pending debts with the Secretary of Finance, taking into account the deadline of the period.
- Evaluate the debit balances with the Secretary of Finance in accordance to accounting principles and fiscal regulation.
- Verify that the accounts are properly classified in the balance sheet between assets and liabilities.
- Control the accounting of all claims made by the Public Administration, in case these exist.
- Evaluate that the procedures are carried out complying with established legal regulation.
There are 3 ways the Tax Administration Service (SAT) may perform tax audits:
- Online revision.
- Home visit to the taxpayer.
- Documentation that accredits the fiscal compliance.
A tax auditor is who verifies that the declarations made by the taxpayer correspond to those at the Secretary of Finance, that is, that tax payment has been fulfilled and all is in order.
Once the auditor obtains and analyzes the collected information, an opinion called audit report should be made, detailing all investigated information and providing commentaries and personal opinions.
A tax audit lasts 12 months until concluded. After this period, the taxpayer is allowed 20 days to explain the conclusions of the Treasury, in case it is necessary. Once the deadline expires, the Secretary of Finance has 6 months to notify the taxpayer about its tax credit, including fines, surcharges, and updates generated for the infringement.
In QuAdrans Law and Finance, we offer accounting service so that you, as a taxpayer, can be provided with advice from certified accountants and carry out these procedures correctly.
