Heightened Scrutiny on the Settlement of Intangible Services
Recently, we have observed increased interest from tax authorities in the settlement of intangible services, leading to more frequent audits in this area. This trend is likely driven by the widening VAT gap, prompting tax administration to thoroughly verify the documentation and accounting of such expenses. What risks does this pose for businesses, and how can they be mitigated?
Key Risks for Taxpayers
Taxpayers may face several significant risks stemming from these audits:
-
Questioning the right to deduct VAT and include expenses in tax-deductible costs – potentially resulting in tax arrears and the obligation to pay interest.
-
Failure to exercise due diligence in relations with contractors – which could lead to accusations of involvement in issuing so-called “empty invoices” and result in VAT and criminal tax sanctions.
How to Minimize These Risks?
To safeguard your company from the consequences of tax audits, it is essential to ensure proper VAT and CIT compliance. We offer comprehensive support in this regard, including:
-
Verification of documentation related to intangible services (e.g., marketing services, logistics fees, discounts) for compliance with current tax authority practices and case law.
-
Analysis of contractual terms and their alignment with the actual documentation and settlement methods.
-
Support in developing or updating internal procedures for documenting and settling intangible services, incorporating the latest positions of tax authorities and administrative courts.
Benefits for Your Company
By implementing appropriate procedures and verifying documentation, businesses can: Reduce the risk of questioning the right to deduct VAT and include expenses in tax-deductible costs. Minimize the risk of being deemed negligent in settlements, thus reducing exposure to “empty invoice” allegations. Develop legally compliant procedures that streamline daily tax settlement processes.
Contact Us
If you would like to learn more about securing your company against the consequences of tax audits, feel free to reach out: Łukasz Woźniak – VAT Manager (lukasz.wozniak@thedy.pl)