Special Tax Rules For Auditing Wholesale Trade

Bookkeeping is the same for all businesses

– Large taxpayers can make transactions through banks, whereas smaller businesses can make all their transactions in cash

– Registration of daily incoming payments is necessary

– Most of the wholesalers combine the use of cash with that of checks

– During public sales in the case of wholesalers each sale beyond Euro 80 should be accompanied with a tax invoice. It can be accompanied with every other invoice issued by the taxpayer’s system, but in special circumstances the tax offices can authorize the use of invoices issued from the taxpayer’s system.

Based on his interest to make as much circulation as possible, a wholesaler or importer works with large circulations for a small profit margin as compared to a retailer. 먹튀검증사이트 The profit margin should be sufficient to ensure a high standard of living.

Recommended tax audits are as follows:

– Exercise to understand the price increase is considered essential

– Match the cash account – especially when we have to do with cash

– Match with the bank – if possible. Which are the bank transactions?

– Sales commissions – if necessary

– Compare personnel salary levels with sales – if necessary

– Check available goods – match this with registered data

– Select some entries or exits form the storehouse register and compare with invoices – if necessary

– Invoices – make sure rules have been followed

– Staff canteens in large businesses are considered separate from the main activity and have not been considered for VAT purposes – you should audit them too

– Copies of correspondence, including orders for foreign suppliers – foreign suppliers do not supply goods based on promises except cases when they have to do with regular buyers

– If the shipment is large, credit notes are prepared by the supplier through the bank system so that their money is guaranteed. Buyer should be aware of this fact

– The taxpayer should ensure the credit in order to pay for imported goods, otherwise, where will the money come from?

– Invoices should be issued by the foreign supplier and contain details of goods and prices applied

– Copies of incoming invoices for imports which state the import taxes that have been paid

– Evidence of current payment

– Check the price structure and pay attention to sales with considerable discount to related taxpayers (branches) and unregistered sales. This is known as “transfer pricing” and intends to ensure profit margins outside registered businesses and without paying VAT

– If there are credit sakes, check that the tax has been declared according to VAT rules; it is not common to issue invoices at the moment the money is received

– Are deposits required from some of the clients or from all of them, and if this is true, has VAT been paid correctly in the case of prepayments?

– Lists of clients and suppliers and the tax requirement to crosscheck information for suspected segments of the transactions;

– Discover what audits have been made by company management as regards employed sellers

– Is any certain product massively used for personal use – this is very likely to happen in the case of small wholesalers of food products.

– If they have their own transportation means, ask to see maintenance registrations – do this data match with the number of declared means of transportation in use?

As is the case with most traders, there is always a possibility that sales and purchases have been hidden. It is relatively easy to verify purchases, since all imports are sent to tax administration from the Customs.

– Checking invoiced prices versus payments and make sure that selected sales have been verified through customer’s accounts

– Discovering where the goods are stored if they have not been directly submitted to the importer or buyer and if it is necessary, making an audit visit to check the amount of stock available.

– As a tax auditor must be done declared imports match with the data from the Customs?

– If possible, must be matched the transportation invoices with the imports, since the taxpayer may not present the entire sum of his business transaction

– Inventories can be manipulated. Comparisons between available inventories may reveal a lot of things. The next step is to do incoming, outgoing and sales registrations match?

– Low declarations. Tax auditor have to check that presented prices reflect the full cost of the product, general costs, profit margin and the cost of re-packaging. If there are sales to related companies (branches), the tax auditor has the duty to do sale prices of the same nature applied on sales to other taxpayer’s match?

– The company may extend from financial funds. This represents a direct risk for the revenues if the company does not pay taxes. It is an extra reason to suspect that sales have been hidden

– Buyers who should have been registered for VAT, but in fact are not. Tax auditor must ask for data on sales to a particular buyer which is close to the registration thresholds during a 12-month period. The same principle applies for material suppliers who do not issue VAT invoices, but whose volume of work shows that they should have been registered. However, tax auditor needs to remember to send verification requests to respective tax offices.

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