Although the authorities have the discretion of conducting tax audits, they can be an inconvenience to your business. This is because you might need to dedicate some staff and resources to ensure full cooperation with the authorities. Additionally, any issues that can are detected can lead to the suspension of your business operations. As such, consulting a tax agent is critical to ensure that you follow all the guidelines in regards to the declaration of taxable income and the preparation of the necessary documents. Below are tips that can prevent the disruption of your business through unnecessary tax audits.
Sending and receiving money from known tax havens
A considerable number of companies use tax havens to hide some of their income. As such, if you are regularly engaged in sending money to these locations, you will most likely receive negative attention from the authorities. One way to avoid your transactions being flagged is to avoid large transactions with tax havens. Ensure that minimal amounts are transacted each time and that you have the proper paperwork to account for these transactions. Another option would be to significantly reduce transactions with countries that are typically used as tax havens or to launder cash.
Ensuring strong employee loyalty
Many tax audits are caused by unhappy employees who secretly send confidential information to the authorities. However, in some cases, mistakes might have occurred, and the information presented to the authorities might be biased. To prevent such incidences, arrange for training and team building sessions that ensure all employees understand the value of loyalty. Apart from leading to increased productivity among employees, they will be able to point out any mistakes and assist in developing solutions, instead of rushing to the tax authorities.
Having internal audits
Despite the fact that you have hired professional accountants, it is necessary to monitor their activities regularly. This can be achieved by having internal audits, although you must use independent workers. During this process, all the transactions done by the company will be assessed to assess their validity and legality. The amount of tax paid should also be keenly evaluated since any omission can lead to problems with the relevant authorities. Such audits should be done regularly to prevent mistakes or intentional omissions from going undetected.
It is essential that you consult with professional accountants and experienced tax agents to reduce the chances that the authorities will flag your business, thereby disrupting your operations.