Annual report – what are the most typical tax risks when preparing it?

Very often, in practice, company leaders do not pay attention to the fact that each company, when drawing up an annual report, faces tax risks, which an entrepreneur does not even think about. Therefore, we invite you to think it over in time and delve into the problem so that you are ready for it before the SRS visit.

And these risks can be as follows:

• Quite often, we are faced with a situation when a relatively simple operation is not performed when drawing up an annual report. Namely, tax balances on financial statements at the end of the reporting year are not compared with the history of balances in the SRS. In this way, inconsistencies that affect financial data are identified;
• A problem arises in the transfer pricing documentation if a company conducts transactions with related parties but has no evidence that these transactions were made at market prices. It should be remembered that if the value of a transaction with a foreign related party exceeds 250,000 EUR per year, then the company must have transfer pricing documentation; and if this amount exceeds 5,000,000 EUR, this documentation must be submitted to the SRS;
• Incorrect VAT proportions or separate VAT accounting should be noted as significant tax risks. Companies often do not think that they are carrying out transactions that are not subject to VAT, as a result of which they lose the right to deduct pre-paid tax in full;
• In practice, we often come across the fact that a company receives loans at interest, but at the end of the year does not calculate or incorrectly calculates increased interest payments for inclusion in the CIT base;
• Significant tax risk associated with non-payment of CIT from management and consulting services.

The head of the company is responsible for accounting.

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