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Tax Audit Defense

Can I negotiate with tax auditors during the inspection?

Yes, effective communication is key. While you cannot negotiate the law, you can clarify factual circumstances and provide evidence that may persuade the auditor not to issue certain assessments.

What triggers a tax audit in Georgia?

Common triggers include VAT refund requests, consistent losses over several years, discrepancies between declared income and bank turnovers, or information received from third parties (e.g., banks, partners).

Does appealing suspend the tax payment obligation?

Yes, filing an appeal within the 30-day deadline suspends the obligation to pay the disputed tax amount and penalties until the dispute is finally resolved.

Can I restructure my tax debt if I lose the audit?

Yes, you can apply for a tax agreement to restructure the debt, paying it in installments. In some cases, the Revenue Service may also agree to reduce penalties as part of the settlement.

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Tax Audit Defense is a vital service for any business or organization in Georgia. An audit conducted by the Revenue Service (RS) can be either cameral (remote) or field (on-site), and its results often determine the company's financial future. The audit process is stressful and requires specific knowledge not only of the Tax Code but also of procedural norms and audit communication etiquette. Incorrectly submitted documents or verbal explanations can lead to additional tax assessments and high penalties (from 50% to 100% of the principal amount). The involvement of a qualified lawyer from the start of the audit significantly reduces risks and increases the chances of a positive outcome.

The audit defense service includes full legal support from receiving the audit order to appealing the final act. Specialists offer:

  • Pre-audit risk assessment and documentation organization (so-called "health check");
  • Managing communication with tax auditors and preparing responses to inquiries;
  • Submitting reasoned objections to the draft audit act;
  • Appealing assessed taxes and penalties to the Dispute Resolution Council of the Ministry of Finance;
  • Court representation in tax disputes;
  • Negotiating tax agreements for debt restructuring.
This service ensures that your rights are protected at every stage of the administrative proceeding.

Tax audit defense is necessary in many practical situations. For example, a company requested a VAT refund, which often triggers a thematic audit. If the accounting department fails to present all invoices, the RS may cancel the credit and impose a fine. Another scenario is inventory checks — if stock balances do not match accounting records, the difference is treated as a sale and taxed. Also, disputes over the qualification of transaction content (e.g., loan vs. dividend) are common. In such cases, the lawyer proves the economic substance of the transaction and protects the company from unfair taxation.

The legal framework relies on the "Tax Code of Georgia," which defines audit rules and taxpayer rights. The "General Administrative Code of Georgia" and Ministry of Finance orders regarding audit procedures are also important. In case of a dispute, the "Rule for Reviewing Tax Disputes" applies. The lawyer uses these norms to identify procedural violations by auditors (e.g., missed deadlines, ignoring evidence), which can be grounds for canceling the tax demand.

The process begins with reviewing the audit order. The lawyer attends all interviews and monitors the drafting of minutes. If a tax demand is issued, the lawyer prepares a complaint within 30 days. Statistically, submitting a qualified complaint to the Dispute Resolution Council often leads to the partial or full cancellation of assessed amounts. With the help of a specialist on Legal.ge, you are not alone against the state machine.

Legal.ge is a platform giving you access to the best tax lawyers. Tax disputes require aggressive defense and deep professional knowledge. Protect your business from financial loss with experts from Legal.ge.

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