The subject of tax inspection

The fiscal inspection represents the activity that has as object the verification of the legality and conformity of the fiscal declarations, the correctness and accuracy of the fulfillment of the obligations in connection with the establishment of the fiscal obligations by the taxpayer/payer, compliance with the provisions of fiscal and accounting legislation, verification or establishment, as the case may be, of the tax bases and the related factual situations, establishing the differences of the main fiscal obligations.

On the occasion of the fiscal inspection, the fiscal inspection body shall proceed to:

– examination of the documents in the fiscal file of the taxpayer/payer;

– verifying the concordance between the data from the fiscal declarations with those from the accounting and fiscal records of the taxpayer/payer;

– checking the concordance between the data from the fiscal declarations with those from the accounting and fiscal records of the taxpayer/payer, including from the standard fiscal control file;

– analysis and evaluation of fiscal information, to confront the fiscal declarations with its own information or from other sources and, as the case may be, to discover new elements relevant to the application of the fiscal legislation;

– verification, finding, and tax investigation of documents and facts resulting from the activity of the taxpayer/payer subject to inspection or other persons regarding the legality and conformity of tax returns, the correctness and accuracy of the fulfillment of the obligations provided by the fiscal and accounting legislation;

– requesting information from third parties;

– checking the places where taxable income-generating activities are carried out or where the taxable goods are located;

– requesting written explanations from the legal representative of the taxpayer/payer or his proxy whenever they are necessary during the tax inspection, for clarification and finalization of the findings;

– informing the legal representative of the taxpayer/payer or his proxy, regarding the findings of the fiscal inspection, as well as their discussion;

– the correct establishment of the tax base, of the differences due in addition or less, as the case may be, compared to the main tax liability declared by the taxpayer/payer and/or established, as the case may be, by the fiscal body;

– establishing the tax base, the differences due in addition or less, as the case may be, compared to the main tax liability declared by the taxpayer/payer and/or established, as the case may be, by the fiscal body;

– sanctioning according to the law the facts representing violations of the fiscal and accounting legislation found and the arrangement of measures to prevent and combat deviations from the provisions of the fiscal and accounting legislation;

– ordering precautionary measures;

– the application of seals on the goods, drawing up minutes in this respect.

Persons subject to tax inspection

The fiscal inspection is exercised on any person and entities, regardless of their form of organization, which have obligations to establish, withhold, or pay the fiscal obligations provided by law.

Selection of taxpayers in order to carry out the tax inspection

The selection of taxpayers/payers to be subject to tax inspection is made by the tax inspection body according to the level of risk. The level of risk is determined based on the risk analysis.

The risk analysis consists of identifying, assessing, and managing the risks of non-compliance with the declaration of taxable income.

The risk of non-compliance with the declaration of taxable income related to a natural person represents the significant difference between the estimated income in the risk analysis and the income declared by the natural person for the same taxable period. 

The taxpayer / Payer cannot object to the selection procedure used.

Period subject to tax inspection

The tax inspection is carried out within the limitation period of the right to establish tax claims.

Tax inspection notice

Before the beginning of the tax inspection, the tax inspection body has the obligation to notify, in writing, the taxpayer in connection with the action to be carried out, by sending a tax inspection notice.

The tax inspection notice shall be communicated to the large taxpayers 30 days before the start of the tax inspection and to the other taxpayers 15 days before the start of the tax inspection.

The tax inspection notice will include the legal basis of the tax inspection, the start date of the tax inspection, the tax obligations, other obligations provided by the fiscal and accounting legislation, as well as the periods to be subject to tax inspection, the possibility to request the postponement of the start date of the tax inspection and the possibility of submitting or correcting the tax return related to the periods and receivables that will be subject to the tax inspection, until the date of the beginning of the tax inspection.

Duration of the tax inspection

The duration of the tax inspection is set by the tax inspection body, depending on the objectives of the inspection, and cannot be longer than 180 days for large taxpayers, taxpayers/payers who have secondary offices, regardless of size, as well as for non-resident taxpayers, 90 days for medium taxpayers and 45 days for other taxpayers.

The taxpayer’s right to be informed

At the end of the tax inspection, the taxpayer must be informed about the issues and costs in the tax inspection action and their fiscal consequences. 

In this sense, the tax inspection body communicates to the taxpayer the Draft tax inspection report, in electronic format or on paper, allowing him to express his point of view.

With the communication of the draft report, the tax inspection body shall communicate the date, time, and place of the final discussion, but not earlier than 3 working days from the date of communication of the draft tax inspection report, respectively 5 working days in the case of large taxpayers.

The result of the tax inspection

The result of the tax inspection is recorded, in writing, in a Fiscal Inspection Report, which presents the findings of the tax inspection body from a factual and legal point of view and their fiscal consequences. 

The tax inspection report shall be drawn up at the end of the tax inspection and shall include findings relating to all periods and all tax obligations set out in the Tax Inspection Opinion, as well as in connection with other obligations provided by the fiscal and accounting legislation that have been subject to verification.

Based on the Fiscal Inspection Report, within a maximum of 25 working days from the date of concluding the tax inspection, the tax inspection body issues the Taxation Decision.

Challenge of the tax decision

Against the Taxation Decision, the taxpayer may file an Appeal to the issuing fiscal body within 45 days from the date of communication. 

The decision to resolve the administrative appeal shall be communicated to the appellant and may be challenged, within 6 months, at the competent administrative litigation court at the appellant’s home natural person / the appellant’s registered office legal entity.

Author: Atty. Ionut Sfetcu