On 1 February 2016 KPMG issued an article providing insights into the Emergency Decree announced by the Revenue Department for the so-called ‘tax audit exemption program’. Since then, through discussions with and the release of additional information by the Revenue Department, clarifications and practicalities of the program are now understood.
We wish to remind taxpayers that the ‘tax audit exemption program’ is only available until 15 March 2016 and taxpayers therefore need to act quickly should they wish to take advantage of it.
The online application form relating to the program appears straightforward. The applicant is required to fill in minimal information such as the company name, address, tax identification number, name of the authorized person etc. The acknowledgement of receipt will be issued to the taxpayer upon the submission of the application.
Tax payers are being contacted directly by the Revenue Department to participate in the ‘tax audit exemption program’. Although there does not appear to be any obvious downside for taxpayers to register and co-operate with the Revenue Department’s request, we recommend that a cost/benefit analysis be considered in light of the taxpayer’s actual facts and circumstances before applying for the program.
Under the law, the Revenue Department has the right to re-open/re-audit a period/year which was already historically investigated (subject to the 2-5 year prescription period). Where an eligible taxpayer has successfully applied for the ‘tax audit exemption program’, the risk of an audit being re-opened is mitigated.
The KPMG Tax Team is available to assist clients in assessing whether the ‘tax audit exemption program’ would meet their needs and improve tax compliance going forward.
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