Tax audits are conducted at three to five-year intervals. Larger companies with
foreign shareholders are almost always audited regularly, although not every
year is necessarily reviewed with equal intensity.
Tax audits are usually detailed
field reviews of the books, records and of the other relevant documents of the
company and often take several months to complete. In most cases, they
conclude with a closing meeting during which the tax auditors discuss their
findings and conclusions. Usually, both sides are able to agree on questions of
fact, although a taxpayer who disagrees with a position to be taken by the tax
auditors is entitled to ask for the appropriate reservation to be made in the
Once the report is issued, the taxpayer is again given an
opportunity to comment. The comment must be made within a period of some
three weeks; otherwise the report will be forwarded to the section of the tax
office responsible for issuing assessment notices. These notices will amend or
confirm the preliminary assessments previously issued and become final and
binding 30 days after receipt by the taxpayer. Any appeal must be filed by then,
and this deadline must be taken seriously, as a final and binding assessment
can only be reopened in unusual circumstances.
The tax auditors have the right of direct access to the computer of any taxpaying
company that keeps its books electronically. They may interrogate the data on
site using the hardware and software of the taxpayer, or search or analyse
copies of it off site using their own audit software. They may also ask the
taxpayer to analyse or summarise data by criteria which they set.