Main causes of controls
For decades, the tax administration has always made "fine adjustments" against companies (including SME and VSE) operating in the construction and renovation of buildings. But this process has increased in recent years with the increase in social security and the tax burden faced by the construction industry as well as on other activities, while conversely, competition rages more strongly due to the sharp decline in demand (hence certain temptations ...).
Tax audits triggered due to these companies result in tax and accounting negligence, globally and statistically greater than that found in other sectors, such as trade. Correspondingly, a little more frequent visits of inspection work on construction sites (to detect cheap labor exploitation) and social security audits are far from slowing down often leads naturally to an accounting audit of the company.
The leaders of the most common adjustments
Inspectors responsible for monitoring construction companies traditionally working on the following main areas:
Reconstructions of turnover following the rejection of accounting presented irregular and not conclusive.
Search fictitious invoices and (or) complacency following the exercise of the right of communication with banks and companies outsourcing.
Finding serious deficiencies in accounting and tax prove financially catastrophic for the sustainability of the business, due to the consistent application of penalties (in the form of increases of 40% for willful default, or 80% for fraud).
And leaders are targeted directly through the provisions of the Tax Code. If the tax administration shows that Mr. X is the master of the case, amounts reported on behalf of the corporation are taxed personally to his name, in distributed incomes, income tax and to social security contributions.
If the IRS fails to collect enough consistent evidence to indicate at the outset (s) recipient (s) of the income distributed, the company will be invited to the proposal stage of correction, to provide all specific information and to contact individuals involved.
As so often nobody dares wear "the hat", the company gets the fine provided by the CGI, 100% of the total amount for which the beneficiaries did not want to appoint. In this case, the leaders of law or fact at the time of the alleged offenses, are jointly and severally liable for payment of the above fine.
Finally, the inspector may make the application on behalf of the corporation, a fine of 50% (calculated on the gross amount of money corresponding to the invoices of subcontractors complained).
If no miracle cures, suggestions of solutions upstream and downstream are brought into play.
Prevention for accounting and tax, compliance with labor legislation and reporting requirements on social security contributions are largely discouraged by the tax administration to engage in a tax audit.
In the event that an inspector decides the company will go to the "ropes", the tax lawyer is ready to act to regulate the audit process. By training and experience in the field, this professional is responsible for ensuring compliance with the oral and adversarial interventions of the inspector and discuss adjustments to the agreements and contracts at hand.
In case of disagreement, the attorney continues (before eventually bring the dispute before the competent court) to use all the remedies provided by the legislator and the Charter of Rights and obligations of the audited taxpayer. He will make sure the situation is taken care of and heard in front of various representative tax authorities, as well as the superiors of the auditor.