2018. 10. 29. 15:44
As it is already known to taxpayers and the general public, the changes in tax law introduced in 2018 have generated the most significant changes of the past two decades. The purpose of this article is to draw attention to a particularly important change.
As regards the practice of inspections by the tax authorities, so far it was typical that the taxpayers subject to inspection did not exhaust all legal remedies available to them. As the legal consequences (sanctions) are not included in the reports drawn up by the tax authorities, in many cases, taxpayers make no comments on the findings contained in these reports, or even if they do so, they often formulate these comments themselves.
Under the previous legislation, this did not result in a significant disadvantage for taxpayers as new facts and evidence could be presented in the appeal lodged against the decision adopted by the competent authority on the basis of the investigation report.
Pursuant to the provisions in force from 2018, however, comments made on investigation reports have become of paramount importance. They represent the last possibility for the taxpayer concerned to refer to any new facts or evidence without limitations. In the appeal and in the proceedings initiated based on the appeal it will no longer be possible to present any new facts or refer to any new evidence that the appellant had been aware of before the first instance decision was adopted but failed to furnish the given evidence or refer to the given fact despite the request of the competent tax authority. The only exception is reference to facts or evidence that are grounds for invalidity. Thus, in contrast with the past, there is no longer room for “manoeuvres”; previously most taxpayers were saving the weightiest arguments and – what the taxpayers believed to be – the most convincing evidence for the official proceedings.
Another change is that, although the time limit to present comments has been extended to 30 days in the case of inspections by the tax authorities (previously: ex-post investigations), this time limit now constitutes a period of limitation. Once this period of limitation has lapsed, it is no longer possible to present a request for proof.
Based on the foregoing, it is important for taxpayers to consult an expert at the earliest possible stage of the proceedings, so that they can use the available statutory legal remedy as professionally as possible when making comments on the authority’s inspection report. Otherwise, if they make use of an external specialist consultant only at a later stage of the proceedings, they may not be able to present any circumstances in favour of the taxpayer.
Because of this limitation periods, the lack of due care may cause material financial losses to taxpayers.