No tax audit due to missing administration? Submitting your administration with the garbage, does that make you cannot be audited? That is the question.
Court case
A lady organized workshops and parties for children. In the Value Added Tax return the paid VAT was deducted from the collected VAT. The tax office made inquiries about the invoices for which the VAT was claimed back.
The lady informed should not comply with that request. She moved her residence from the one place to the other. While organizing the move, she brought a lot of house hold to the waste depot of the city. Apparently her booking was in that waste as well.
The tax office asked her to contact the suppliers that invoices her for a copy. She replied that her suppliers went all bankrupt and could not provide a copy of the invoice.
The tax office issued for a five year period a correction VAT assessment. We expect the prepaid VAT is denied and a 25% to 50% penalty on top of that. The lady went to court. However, the court dismissed her complaint. She had not provided the invoices and bringing the administration to the city waste deposit is not regarded an act of god.
Administration obligation
The administration is a crucial part of your taxation in a company. The tax office needs to have access to that administration in case the tax office would like to audit the books.
The entrepreneur is responsible to provide the tax office in a reasonable period of time full access to the bookkeeping. A reasonable period of time is about two weeks and full access are regarded the receipts.
Not only the receipts can be asked to show, also your diary. Not only the business diary, also your personal diary. In court the privacy objection was denied in case of an entrepreneur and his bookkeeping.
Tax is exciting
We think tax is exciting. An audit is never exciting. Out clevering the system by stating you accidentally brought the bookkeeping to the waste deposit. Or the dog ate the bookkeeping. Or the children destroyed the bookkeeping. All arguments used in the past, all not valid.
