The tax authority conducted a desk audit of the company’s amended profit tax declaration. Following the audit, the organization was assessed additional profit tax, along with penalties and fines.
The company unjustifiably inflated the amounts of expenses reducing its taxable income, including both expenses from sales and non-operating expenses.
The company’s accounting records matched the initial tax declaration but diverged from the figures presented in the amended declaration.
The organization was requested to provide explanations for the increase in expenses in the amended declaration, which led to a reduction in the tax base, and to substantiate these costs with primary documents.
The taxpayer provided only a portion of the requested documents. Specifically, it failed to submit tax registers for direct expenses detailing cost items, as well as accounting certificates for adjustments to direct, indirect, and non-operating expenses.
Disagreeing with the tax authority’s decision, the company filed a lawsuit seeking to invalidate it.
The courts ruled against the plaintiff, basing their decision on the following findings:
- The changes in the declaration figures were not supported by primary accounting documents or reversal entries in tax accounting registers.
- The submitted trial balances and analysis of account 20 lacked detailed breakdowns by counterparty. Furthermore, the analysis of transaction reports did not provide information on the correspondence of all transactions or the opening/closing balances for each counterparty individually.
- The documents presented could not justify the claimed expenses.
- Data on indirect expenses reflected in the amended tax declaration did not align with the company’s accounting records.
- Waybills lacked details on vehicle routes, making it impossible to confirm their use in the taxpayer’s production activities.
- Other non-operating expenses claimed by the company were not documented and were deemed unsubstantiated.
