The number of NTCA tax audits is decreasing, legal compliance verifications are increasing

During that period, 97 audits were carried out at PS’s clients, which were distributed as follows: 6 supporting procedure, 74 legal compliance verifications and 17 tax audits. “As the data shows, the number of NTCA tax audits is decreasing, as the authority also seeks cooperation, which explains the higher proportion of legal compliance verifications and supporting procedures,” said Dr. Gergely Mustos, tax expert of PS.

24.3% of the clients have received some form of NTCA audit, which is an integral part of the companies’ overall risk management strategy. According to the data, only 5.5% of PS’s clients received multiple audit. Most of the investigations were targeted at the real estate sector, IT companies, companies operating in the automotive industry and affiliated companies.

Although the number of tax audits is decreasing, the number of legal compliance verifications is increasing, which is beneficial for both the companies and the tax office. The purpose of these investigations is not to impose fines, but to make taxpayers comply with the law and correct errors, while during the supporting procedure the tax authority helps taxpayers to comply with the law without examination. Out of 70 cases, PS clients were subject to default fines in only two cases during the legal compliance verifications, in which cases the clients naturally accepted and corrected the errors.

During the tax audits, tax shortages were found in 7 cases, the aggregate value of which was relatively small compared to the revenue-generating activities of the affected clients. According to PS’s experience, NTCA’s auditors are quicker to spot incorrect returns and data submissions, as well as taxpayer non-compliance.

VAT is still the hit tax type for NTCA

Looking at the areas of various NTCA audits, it can be stated that the tax authority continues to pay special attention to value-added tax (VAT) and transfer pricing (TP) records, which are of key importance for both the tax authority and taxpayers.

Effective cooperation with NTCA

Process Solutions places special emphasis on effective cooperation during legal compliance verifications. As Dr. Gergely Mustos, tax expert of PS explained, “During NTCA audits, the goal is always to clarify possible issues as soon as possible, thus avoiding tax audits with more serious risks.” This cooperation is not only useful for clients, but also helps the work of the tax authority, as possible misunderstandings can be clarified in a shorter time. “The legal compliance verifications provides a relatively tight deadline of 30 days to clarify the problem that has arisen, so it is extremely important to prepare all necessary documents immediately,” added Dr. Gergely Mustos.

One of PS’s innovative solutions is the so-called “Panic Button” function, the essence of which is that a professional team provides immediate support to colleagues as soon as they learn about a tax audit at their client.

Positive feedback and future developments

Both PS’s clients and employees positively rate the services introduced to support audit processes. Customer satisfaction in legal compliance verifications is constantly increasing, as these procedures are less burdensome for companies and provide opportunities for quick cooperation with the tax authority. In the future, PS plans to publish further data analysis and statistics to provide an even more detailed picture of tax audit trends.

We at PS are committed to providing our clients with comprehensive support in tax and accounting matters and continues to pay special attention to effective cooperation during tax authority audits.