Do you know what to look out for with testifying at the tax office? We often associate the term witness with a court proceeding. However, the role of the witness is also very important in tax proceedings. The testimony of a witness is one of the most important parts of evidence in tax administration.

But let's start from the beginning. Who is actually a witness? A witness can be any person who is able to perceive the events around him, remember these perceptions and reproduce the content of his perceptions. In a human language, a witness can be any person who can testify about facts that he has personally seen or experienced. It is often, for example, the manager of the supply company, who can tell about the business with your company, the employees of the supplier or and your employees.

Taxpayers are often surprised to receive a notice of a witness hearing during a tax audit. Do not mistake about ignoring this notification, as you have the right to attend this hearing and also have the opportunity to ask the witness questions. If you are unable to attend such a hearing, get represented by your tax advisor.

It is the witness who can confirm the important facts that are a condition for the application of the tax expense. For example, an expense will be a tax expense if you can demonstrate that your supplier has provided you with the service in question and who actually participated in the provision of the service. It will be the manager or employee of your supplier who confirms that they have provided the service.

However, it also happens that the inspector summons a witness whose name does not tell you anything. Wondering who it is, what it will comment on and attend the interrogation. The bad thing that can happen to you is that the manager of the supplier does not remember anything as a witness, he expresses himself vaguely and questions the delivery of your company. Such a situation is just water for the tax inspector's mill. Therefore, it is good to attend the hearing and ask your own questions if necessary.

If you have indications that the inspector has any doubts about how the delivery to your company took place, we recommend that you suggest that the inspector hear the persons who can clarify the transactions being inspected. The controller should accept your proposals and summon these persons. If the interrogation takes place, do not leave anything to chance and think about the facts that the person can testify to and prepare for them the questions that you will ask him during the interrogation itself.

Despite the current pandemic situation, where we are all trying to limit personal contacts, the questioning of witnesses is ongoing. Currently, the curfew no longer applies to visits to tax authorities.

Finally, we summarize our advice:

- take part in the examination of witnesses,

- prepare questions for witnesses,

- suggest witnesses yourself.

If you would like to know more about tax audits, we're bringing you other articles we've published on the topic of tax processes. If you want to know how to prepare for a tax audit, how to do about its suspension, or how to proceed in case of its inactivity, our articles are tailor-made for you.

As part of our many years of experience at VGD, we already have extensive experience with how the tax audits themselves take place and we can represent you in the entire process so that you come out of it with as little damage as possible. We also recommend that you follow our website, Facebook or LinkedIn for more up-to-date information, as well as tips and advice on your business journey.