Tax audit: how to respond to requests without harming yourself

You have received a request from the tax authority or learned that a tax audit has started. The situation is unpleasant in itself, but not critical if you act calmly and by the rules. In practice, many people start answering at random, hand over unnecessary documents or ignore the notification, and then end up with additional assessments, fines and penalties. To avoid this, it is important to understand exactly what is happening and what rights you have.

A tax audit in Almaty is not much different from the same audit in other regions: the single Tax Code applies. However, there is city-specific nuance: a large share of entrepreneurs work with non-residents, imports, marketplaces and cash payments. These are exactly the areas where the tax authority most often requests explanations. A well-drafted response to a request and correctly selected documents often resolve the issues before the inspectors visit the premises.

The tax audit has started: what is happening and why you received a request

A request from the tax authority is not yet an accusation. It is how the tax authority asks you to explain a transaction, reconcile a discrepancy with a counterparty's data or confirm a deduction. You need to respond, but every word and document will go into the case file, so rushing does not help here.

The next important step is to understand the scale. Desk control is carried out on the basis of your reporting — without visiting you, using documents and databases. A tax audit at the location of the business is already the work of inspectors on your premises, with inspection, interviews and seizure of documents, and you need to prepare for it differently.

• Desk control — a request concerning a declaration or a discrepancy, most often in writing.
• Tax audit — an order from the state revenue authority and the work of inspectors on your premises.
• The request arrives before the audit or already within it — the scope of your response depends on this.
• The purpose of the request is explanations and documents, not an immediate additional assessment.
• It cannot be ignored: an unfulfilled notification under desk control leads to the suspension of debit operations on accounts.

What rights you have during a tax audit and a request

During a tax audit you have rights that many people learn about too late. First of all, you are entitled to know the basis and subject of the request: which audit is being conducted, which taxes and periods are concerned, and exactly what information is wanted from you. You must be served with a copy of the tax audit report and the notification of its results, and on the substance of the questions you may give written explanations — this is not an admission of guilt, but your position.

Separately — the right not to incriminate yourself, to use the assistance of a representative, and to the observance of tax secrecy. If you are unsure how to answer so as not to create unnecessary evidence against yourself, it is sensible to engage a lawyer for tax audits: defence during a tax audit is built on the principle that every answer is consistent with the documents and does not broaden the subject of the request.

• to know the basis and subject of the request
• to receive the audit report and the notification of its results
• to give written explanations
• not to incriminate yourself
• to use the assistance of a representative

Deadlines for responding to a request during a tax audit and what happens if you are late

The deadline for responding to a tax request is usually stated directly in the request or notification itself — most often it is working days from the moment of receipt. Treat this deadline as hard: if it falls on a day off, submit the documents on the next working day, but where possible it is better not to leave it to the last minute. A late response during a tax audit turns you from someone who is responding into someone who is evading, and enforcement measures then kick in.

What silence risks: the state revenue authority is entitled to bring you to administrative liability for failure to provide information and to move from a request to a tax audit. In parallel, a fine is issued for failure to provide documents, and where accounting documentation is absent, the objects of taxation are determined by the indirect method — without your figures, using information from other sources. What is important to understand:

• Administrative liability also arises for the partial failure to provide the requested documents.
• The indirect method produces figures that are difficult to challenge without primary documents.

How to respond to a tax request: structure of the explanation and documents

It is better to respond to a tax request in writing: this records your position and the date of your response. In the explanation to the tax authority, state which request you are responding to (number and date) and briefly the subject: what information or documents have been requested. Give a direct answer on each point, and if the data is not available, say so, without leaving any question unanswered. At the end, list the attachments, put the date and signature.

Documents in response to a request may be submitted in person through the records office, by post as a registered letter, or through the taxpayer's cabinet. Copies are usually certified by the signature of the director or of the taxpayer themselves with a transcript; if the originals are requested, they are submitted with an inventory. Keep a second copy and the acknowledgement of receipt. List of attachments:

• copies of the documents specified in the request;
• an inventory of the attachments;
• an explanation with calculations;
• representative's power of attorney, if the response is not submitted by the taxpayer personally;
• confirmation of sending or receipt.

What documents to prepare during a tax audit and how to submit them

Through the taxpayer's cabinet, the response to the request is sent electronically, the system records the date and time — this confirmation of sending the response remains with you. On paper and by courier, keep the inventory, receipt or acceptance mark, otherwise it will be difficult to prove that the documents were submitted to the tax authority.

What to prepare in advance and what to send it with — briefly:

• copies of documents for each point of the request, certified at your discretion
• a register of attachments with page numbering
• confirmation of the signatory's authority
• a screenshot or receipt confirming the response was sent

Whichever method you use, keep a full set of what you sent.

Interview and inspection during a tax audit: how to conduct yourself

If you are summoned to give explanations during a tax audit, you should attend, but speak to the point. Answer only questions that relate to the subject of the audit: your activity, specific transactions, documents for the period under audit. Questions about your personal life, about other counterparties, about matters not covered by the audit order, fall outside its subject.

Behave calmly and do not argue with the inspector on the spot, but record your objections in writing: they will be needed for written objections to the tax audit report and any further appeal. If the summons to the tax authority concerns matters you are not prepared for, ask for time to prepare: it is better to attend with documents and explanations than to answer at random.

When premises are inspected during a tax audit, inspectors are entitled to be in work areas and to record what relates to the audit. The conversation should be paused if a question goes beyond the subject of the audit, if you have not been shown the audit order or an official ID, or if you are being rushed to sign a protocol without your comments included. What is important to do:

• ask to be shown the audit order and ID
• clarify which questions relate to the audit
• record the full name and position of each participant
• before signing any document from the inspectors, write in your comments
• take a copy of any signed document with you

Mistakes during a tax audit that cost the most

Mistakes during a tax audit are most often connected with how you respond to a request. Ignoring it or replying late gives the inspectors the right to impose administrative liability and to determine taxable items by indirect method. Superfluous documents that do not relate to the period or the question create new grounds for a deeper audit.

Explanations given without checking them against the accounting records and source documents lead to contradictions that are then hard to explain. A signature without authority makes the document invalid, and trying to reach an understanding does not help: it is recorded and strengthens the inspectors' position. If the results have already been issued, the appeal begins with a complaint against the notification of the audit results to the authorised body — the State Revenue Committee of the Ministry of Finance.

• Answer strictly the question asked, without widening the set of documents.
• Check the figures in the explanation against the declarations and ledgers.
• Verify the signatory's authority under the charter and power of attorney.
• Do not discuss oral arrangements with the inspectors.

A complaint against the audit results notification is filed with the authorised body; if pre-trial appeal does not help, the dispute moves to court.

The main practical takeaway: respond to any request during a tax audit in writing, on time and strictly within the questions asked. Extra information and emotions almost always work against you.