A tax audit doesn’t always mean bad news, as long as you are well prepared. Here’s a recap of the seminar held at BECI, led by Gauthier Vael and Steve Pierrée, lawyers specialized in tax law at PwC Legal.
The legislative changes in tax matters over the past few years affect both large companies and SMEs (small and medium-sized enterprises). However, a tax audit is not necessarily a sign that everything is going wrong. With a bit of preparation and good management, these inspections can be faced with confidence. On October 17, BECI hosted Gauthier Vael and Steve Pierrée, lawyers from PwC Legal, for a seminar on the best ways to prepare for an audit. Here are the key points to remember.
What is a tax audit?
A tax audit is a procedure by which the administration checks whether your declarations comply with the law. While the process may seem intrusive, it follows well-defined steps. According to Gauthier Vael, “receiving a request for information does not necessarily mean that you have made a mistake. In 50% of cases, it stops at the first step.” Indeed, a tax audit includes several phases:
- Request for information
- Notice of correction or tax notification
- Tax decision
- Tax assessment notice
- Appeal
- Judicial phase, in case of appeal
This process may seem lengthy, but as the lawyers explained during the seminar, knowing the steps and preparing methodically can make all the difference. They also emphasised an important point: the tax administration cannot force you to move or submit documents under conditions that disadvantage you. “What you need to avoid is improvisation,” Gauthier Vael states. Steve Pierrée adds: “What you need to remember is that the administration cannot require you to come and bring documents to their offices.”
In the context of new technologies
The tax administration has adapted to new technologies, and it is important to be aware of this. Today, auditors can access your electronic data, such as accounting files or online invoices. However, there are limits to what they can do. “The inspection cannot go fishing for information,” Steve Pierrée emphasises. Specifically, they do not have the right to directly operate the computer to copy files, the two experts remind.
Nevertheless, the use of technology can also work in favor of taxpayers. It allows for structuring information and providing requested documents in an organised manner. The case law in this area is constantly evolving, and anticipating these changes helps avoid unpleasant surprises, the specialists point out.
How can you prepare?
“Over the years, automation and, more generally, new technologies have raised new questions during tax audits,” the lawyers explain. Gauthier Vael recommends: “You should collaborate with the tax administration, but without accepting everything.” Additionally, it is not advisable to improvise in response to the auditors’ questions; you need to anticipate and surround yourself with tax advisors.
In conclusion, one of the lessons from this seminar is: good preparation can prevent a lot of hassle. Cooperate, yes, but without giving up your rights.
Good to know:
A tax audit can sometimes lead to checks that go beyond your company’s simple accounting. Tax auditors often work hand in hand with other agencies, such as the NSSO, or even foreign tax administrations.
And if you’re wondering how to prepare for an NSSO inspection, BECI interviewed Nadège Toussaint, Senior Associate at Claeys & Engels, whose recommendations you can read in the article “"NSSO inspection: how to prepare?"”
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BECI regularly organizes seminars to help you prepare for your company’s tax inspections. Stay updated by checking our agenda!
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