What is a tax audit? Why is a tax audit done?
Taxes are one of the most fundamental obligations of citizens living in a country. Taxes, which are one of the most important sources of revenue for states, are the primary source of funding for public-sector expenditures.
What is a tax audit and why is it important?
In Turkey, tax processes such as tax collection and auditing are carried out by relevant ministries and various institutions, particularly the Revenue Administration. Tax auditing, on the other hand, is critical in terms of tax, which can be a very complex process, to determine the taxes that individuals or institutions must pay, to pay them healthily, to benefit from various exemptions, if any, and, most importantly, to avoid unpleasant surprises.
The purpose of tax audit is defined in Article 135 of the Tax Procedure Law. Tax auditing, which is defined in this definition as investigating, determining, and ensuring the accuracy of the taxes to be paid, is critical in predicting the situations that individuals and institutions may face in favor or against.
Why is a tax audit done?
Tax auditing is critical in determining the sectors and subjects that have different tax privileges, as well as in revealing the information requests and determinations based on the examination.
Here are some scenarios that can be resolved through tax audits:
- Imbalances and inconsistencies in the Financial Statements,
- Controlling whether costs and expenses are higher or lower than the industry average,
- Tax refund requests,
- If a permanent loss is declared during the operation period,
- VAT is being transferred in unexpected sectors regularly.
- Discounts disproportionate to their activities -exception-KKEG statement,
- High balances are found in the Cash and Partners accounts,
- Examining the black money issue in terms of taxation,
- Capital risk disguised, tracing the traces of significantly large transactions within the context of transfer pricing
Along with these examples, numerous other scenarios and reasons highlight the significance of tax auditing.
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