In the following lines, you will learn more about appealing a tax audit report, the mandatory steps, administrative appeals, and judicial appeals. The audit process concludes with the issuance of a tax audit report establishing tax obligations. In such cases, the taxpayer has the right to appeal the report if they believe it is unlawful or issued in violation of procedural rules. In such situations, we recommend consulting a tax attorney.
Administrative Appeal of Tax Audit Report
The tax audit report can be appealed in its entirety or in part within 14 days of receipt. The decision-making authority is the relevant director of the “Appeals and Tax-Insurance Practice” Directorate (abbreviated as ATIP) at the central office of the National Revenue Agency. The appeal must be submitted through the Territorial Directorate whose employee issued the tax audit report.
An appeal does not suspend the execution of the report. This means the established obligation may be enforced even if an appeal is filed. The execution can be suspended at the appellant’s request, submitted to the authority responsible for reviewing the appeal, along with proof of provided security (usually a bank guarantee) covering the principal and interest as of the date of the request. If no security is provided, the request must include a proposal for security in the same amount. A refusal to suspend execution can be appealed before the administrative court responsible for reviewing the appeal.
The ATIP Director must review the appeal within 60 days, starting 7 days after the appeal is submitted to the Territorial Directorate. If the appeal is left without action, the 60-day period begins after the deadline for rectifying deficiencies. The decision-maker can confirm, amend, or fully/partially cancel the tax audit report in the appealed part. The principle of reformatio in peius applies, meaning the authority cannot worsen the appellant’s situation, e.g., by increasing the established tax obligations.
We recommend consulting a good tax attorney when deciding to appeal a tax audit report.
Options for Administrative Appeals
The decision-making authority may amend or fully/partially cancel the tax audit report in the appealed part. Upon cancellation, the issue is resolved substantively, and the authority’s decision is final. In some cases, the ATIP Director may cancel the report entirely or partially, leaving the dispute unresolved. These occur when the file is returned to the issuing authority with mandatory instructions for issuing a new tax audit report. Such cases include:
1) incomplete evidence that the decision-making authority cannot gather during the appeal process, or
2) significant procedural violations during the audit that cannot be rectified during the appeal process.
In such cases, the process begins from the unlawful action that led to the cancellation of the report.
Judicial Appeal of Tax Audit Report
If the decision following the administrative appeal is not in favor of the taxpayer, the law allows for judicial appeal. We recommend consulting a tax attorney before proceeding with a judicial appeal.
The tax audit report can be appealed through the decision-making authority within 14 days of receiving the decision, or within 30 days in case of a silent refusal (failure to act within the deadline). The case is reviewed by the administrative court in the appellant’s permanent address or registered office jurisdiction. Again, the appeal does not suspend execution, and the aforementioned rules apply if the appellant seeks a suspension. The principle of prohibition against worsening the appellant’s position also applies.
Judicial appeals are subject to certain limitations. The appellant cannot challenge parts of the report that were not appealed administratively. Restrictions also apply to the use of witness testimonies and evidence agreements during the administrative appeal.
The court decides the case on its merits, which may result in full/partial cancellation or amendment of the tax audit report or dismissal of the appeal. The court assesses the report’s legality and justification, including whether it was issued by a competent authority in the proper form and in compliance with procedural and substantive rules. New evidence not presented during the audit may be submitted during the judicial process and must be considered alongside the administrative file.
The administrative court’s decision can be appealed to the Supreme Administrative Court within 14 days of notification.
Conclusion
Appealing a tax audit report is a safeguard for taxpayers’ rights. Involvement of a tax attorney is strongly recommended for effective protection against a tax audit report. For inquiries about audits, revisions, and other tax and social security matters, feel free to contact us. Our tax team includes experienced attorneys and expert accountants.
Learn more about our tax law services – here
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