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Tax Audit Preparation

How far back can the tax authority audit?

The statute of limitations for tax audits in Georgia is generally 3 years. You should ensure all documentation for this period is intact, organized, and readily available.

What if my documents are lost or incomplete?

Preparation gives you time to restore missing documents. We help you contact suppliers for duplicate invoices or draft corrective acts to substantiate transactions before the auditors arrive.

Do I need to check my related-party transactions?

Yes, transactions with related parties are high-risk. We review them to ensure they were conducted at market prices (arm's length principle) to avoid transfer pricing adjustments during an audit.

Can I prepare for an audit if I'm closing my business?

Liquidation triggers a mandatory tax audit. Pre-liquidation preparation is crucial to clear all liabilities, close accounts properly, and ensure a smooth and penalty-free exit.

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Tax Audit Preparation is a proactive legal service aimed at identifying and minimizing a company's tax risks before an official audit by the Revenue Service (RS). Unlike "Audit Defense," which responds to an ongoing audit, preparation involves conducting an internal "Mock Audit" and correcting identified deficiencies in a calm environment. Georgian tax legislation provides mechanisms allowing taxpayers to amend declarations and avoid penalties before receiving an audit order. This service is critical for businesses wishing to avoid unexpected financial losses and maintain a reputation as a compliant taxpayer.

The tax audit preparation service includes comprehensive diagnostics and legal recommendations. Specialists offer:

  • Checking the completeness of primary documentation (invoices, waybills, acts);
  • Recalculating tax bases (profit, income, VAT) and comparing them with declarations;
  • Identifying and documenting problematic transactions (e.g., related-party transactions);
  • Simulating inventory checks of material assets;
  • Training staff on communication with tax auditors;
  • Developing a strategy for filing amended declarations.
This service allows you to face a tax audit prepared and confident.

Preparation is necessary in specific situations. For example, a company plans liquidation or reorganization, which often triggers a tax audit. Advance preparation prevents delays in the process. Another example is when a company requests a VAT refund — a thematic audit is expected, and pre-organizing documents is essential to guarantee the refund. Also, if a company had non-standard operations (e.g., asset write-offs, debt forgiveness), a preliminary legal analysis determines whether these were taxed correctly and if corrections are needed.

The legal framework relies on the "Tax Code of Georgia," which defines taxpayer obligations regarding accounting and reporting. Ministry of Finance orders on document retention periods and formats are also important. Article 68 of the Tax Code allows amending declarations, which exempts the taxpayer from fines (only interest remains). A lawyer uses these norms to minimize financial risk.

The process begins with an audit of the company's electronic databases (RS.ge) and accounting software. The lawyer and auditor jointly check for "Red Flags" — indicators that attract tax authority attention (e.g., consistent losses, low margins). Based on identified gaps, an action plan is drawn up: restoring documents, amending declarations, or formulating a legal opinion. With the help of a specialist on Legal.ge, you can take preventive measures, which is always cheaper than litigation.

Legal.ge is a platform where you can find experienced tax lawyers and auditors. Do not wait for a tax demand — act proactively. Prepare your business for any challenge with Legal.ge.

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Specialists for this service

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