Tax Audit Defense — Five Norms You Must Know
A tax audit is not merely an inspection — it is the preparation period of a dispute, where every step of the taxpayer lays the groundwork for the subsequent court battle. At this stage the Tax Code gives the taxpayer real instruments: Article 41 governs rights during control; Article 267 — the mandatory contents of the act; Article 268 — the decision taken on the basis of the act; Article 272 — the surcharge that accrues with time; Article 299 — the appeal deadlines. This page explains these five norms together, as a single defence map.
Article 41 — the Taxpayer's Rights During Control
The first part of Article 41 grants the taxpayer broad rights: to examine the information about him held by the tax authority; to present his interests personally or through a representative; to demand information on the grounds for conducting control over him; to submit a relevant explanation during a control measure; to attend a field audit conducted with respect to him and to receive an original or certified copy of any decision connected with it; to appeal the authority's act or decision; and not to perform an unlawful act or demand of the authority. The second part guarantees the protection of rights through both administrative and judicial procedure. In practice this means: attendance at the field audit and demanding originals of every decision are the informational foundation of the future dispute position.
Article 267 — the Act and Its Mandatory Content
An act is drawn up on the results of the audit, which must indicate: every factual circumstance, piece of evidence and argument that was material to determining the tax obligation — and where the audit relied on an expert conclusion, the content of that conclusion must be given in the act; the norm applied; the exact dates of the origin of obligations, the computation of tax and fine, the total amount payable or receivable, and the details of the confirming documents. This list is the defence's checklist: every defect of the act — an unsupported figure, an unnamed norm, missing dates — becomes the object of appeal.
Article 268 — the Decision, the Protocol and the Auditors' Council
On the basis of the act an authorized person adopts a decision on the assessment or non-assessment of taxes or sanctions, a copy of which is presented to the taxpayer together with the relevant tax demand. Where an administrative offence is discovered, a protocol is drawn up, and where signs of a crime are found, the materials are immediately sent to the investigative body. The same article defines the Auditors' Council: to shape uniform practice, a council is created by decision of the Minister of Finance, and where a new decision forms a principle of taxation differing from the existing one, the authority may apply to the council, which — no later than 20 days from the application — adopts a decision on applying or not applying that principle, binding on the tax authority.
Articles 272 and 299 — the Surcharge and the Appeal Window
The time factor is governed by Article 272: the surcharge is a tax sanction imposed for non-payment of a tax within the period established by tax legislation, and amounts to 0.05 percent of the unpaid tax for each overdue day — every day of delay adds to the burden. The accrual of the surcharge ceases 3 years after the origin of the obligation to accrue it. Article 299 governs the start of the dispute: a decision of the tax authority may be appealed, and the taxpayer has the right to appeal a decision within 30 days of its delivery. An important detail: the audit act and the decision taken on its basis are appealed together with the tax demand issued on those documents — the dispute begins as one, and the 30-day window works on all of them together.
Frequently Asked Questions
Below we answer the most frequent questions during a tax audit.
May I attend a field audit?
Yes — under the relevant subparagraph of Article 41 the taxpayer may attend the field audit and receive an original or certified copy of any decision connected with it.
What must the audit act contain?
Material factual circumstances with evidence, the norm applied, exact dates of the origin of obligations, the computation of tax and fine, and the details of confirming documents.
How much is the surcharge?
0.05 percent of the unpaid tax for each overdue day; accrual ceases after 3 years.
Within how many days can an appeal be filed?
Within 30 days of delivery of the decision — the act, the decision and the demand are appealed together.
How We Help on Legal.ge
On Legal.ge you can contact an experienced tax-law lawyer who stands beside you at every stage of the audit: defends your rights under Article 41, checks the act against the Article 267 list, assesses the decision and timely files the appeal under Article 299. Fill in the request form on the site and get a qualified consultation on Legal.ge.