Tax Assessment Appeals is a highly qualified legal service aimed at challenging the validity of the principal tax amount (assessment) accrued by the Revenue Service. Tax audits often result in acts where the tax authority's assessment of business revenues, expenses, or operations does not reflect reality or correct interpretation of the law. An incorrect tax assessment can impose colossal financial liability on a company, threatening its solvency. Deep knowledge of tax law is critical in this process, as disputes often involve complex accounting issues, transfer pricing, VAT credits, and the substantive (rather than formal) evaluation of transactions. Legal.ge gives you access to tax lawyers who have experience in the most complex tax disputes and can protect your business's financial interests.
The service of appealing tax assessments includes multi-stage legal support:
- Analysis of the tax audit act: Detailed study of audit materials, identifying factual and legal errors.
- Alternative audit and expertise: Preparing independent audit reports to refute the tax authority's calculations.
- Dispute within the Ministry of Finance system: Filing complaints and representing interests in the Dispute Resolution Councils of the Revenue Service and the Ministry of Finance.
- Court litigation: Preparing lawsuits and court representation to annul the tax demand.
- Lifting tax liens/seizures: Removing or suspending enforcement measures on company accounts and property during the dispute.
- Reaching a tax agreement: Negotiating with the tax authority regarding debt restructuring or concluding a tax agreement.
Real-world scenarios where this service is essential are often related to complex transactions. For instance, the tax authority might deem that services rendered by a company are not related to economic activity and disallow expense deductions, thereby increasing profit tax. Disputes over the cancellation of VAT credits are common when the tax authority considers a transaction to be fictitious. Also, for international companies, the accrual of non-resident withholding tax is relevant when the tax authority does not recognize benefits under Double Taxation Avoidance Treaties. Another scenario is the incorrect qualification of shortages or surpluses revealed during inventory. In all these cases, the lawyer's task is to prove that the company's actions were compliant with the law.
Tax disputes in Georgia are regulated by the Tax Code of Georgia. The Code provides for a two-tier dispute resolution system within the Ministry of Finance (Revenue Service and the Ministry of Finance Council) and subsequently in court. During the dispute process, principles of the General Administrative Code of Georgia are important, specifically the principles of good faith and legitimate expectations. When evaluating accounting issues, the Law on Accounting, Reporting and Auditing and International Financial Reporting Standards (IFRS) are applied. At the court stage, the process proceeds according to the Administrative Procedure Code of Georgia.
The process begins with filing a complaint within 30 days of receiving the tax audit act. The first stage is administrative appeal, which is often faster and more effective than court. Filing a complaint automatically suspends forced tax collection procedures (but does not stop interest accrual). At the Council, the lawyer presents arguments and evidence. If the Council does not satisfy the complaint, the case is transferred to court. In court, the burden of proof is often distributed, but the taxpayer must present documentation confirming their position. Legal.ge helps you find professionals who can speak the "tax language" and prove your case.
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