Cameral What is a tax audit? In this article, we will talk about mobile and camera tax audits.
Tax authorities conduct tax audits using various methods. The main direction of tax control is checking the correctness of tax returns. During tax audits, information from past and current reports is checked in order to determine the facts of debt or overpayment. There is a camera tax inspection and a mobile tax inspection.
What are camera and mobile tax audits?
During a mobile tax inspection, tax authorities carry out a tax inspection at the place where the taxpayer operates. In-camera tax audit is a tax audit conducted by tax authorities without going to the place where the taxpayer operates.
An organization or business entity engaged in commercial, industrial, or professional activities, i.e., an individual entrepreneur or legal entity with any business, shall submit declarations, reports and must submit other documents to the State Tax Service. It should also be noted that cases of delay of deadlines may lead to financial sanctions and administrative fines. Based on the submitted declarations, documents and reports, individual entrepreneurs and legal entities can face mobile and camera tax audits.
Cameral tax inspection is carried out on the legal grounds specified in Article 37 of the Tax Code of the Republic of Azerbaijan.
If any inconsistency is found during the inspection, the taxpayer receives a notice - a camera letter.
How is a camera tax audit performed?
The inspection process by the tax authority is carried out without prior notification to the taxpayer.
The term of the cameral tax audit is determined within 60 days from the submission of the tax declaration, as well as the statement on the calculation of current tax payments. Camera inspection of other tax declarations, as well as references on the calculation of current tax payments is carried out within 30 working days. In the case of receipt of relevant information from the responsible authorities of foreign countries on income received from abroad, the camera tax inspection is carried out within 90 working days from the date of receipt of the information.
After the completion of the tax audit, if the tax authority discovers additional documents or other information whose source is known for calculating the tax, a notice - a tax letter - is sent to the taxpayer within 5 working days. In the corporate tax letter, it is mentioned that the detailed report must be submitted within 10 working days.
If any inconsistencies or errors are identified between the declaration submitted by the taxpayer and the information in the documents related to the calculation of current tax payments to conduct a camera tax audit, the tax authority has the right to request additional information, documents and explanations from the taxpayer.
If at the end of the camera inspection, it is found that taxes are not correctly calculated in the tax declaration, i.e. the tax amount is shown more or less than it should be, the relevant decision on the calculation of taxes is sent to the taxpayer within 5 working days by the tax authority in the form determined by the executive power body. In this decision of the tax authority, the reasons for the calculation and the taxpayer's right to appeal are also mentioned.
If the taxpayer does not submit the tax declaration, documents and information without reasonable grounds to conduct a camera inspection, the tax authority has the right to calculate taxes in accordance with Article 67 of the Tax Code of the Republic of Azerbaijan.
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