Good tax auditing practice
- Date of issue
- In force until further notice
This is an unofficial translation. The official instruction is drafted in Finnish (Hyvä verotarkastustapa, date of issue of the latest version 22.1.2018) and Swedish (God skatterevisionssed, date of issue of the latest version 22.1.2018) languages.
Section 5.2 of this translation has been updated on 28 March 2017
1 Tax audits: definition and objectives
Tax audits are carried out by public authorities and provisions on them are contained in the Act on Assessment Procedure, the Tax Prepayment Act and the Value Added Tax Act, and the decrees issued on the basis of these acts. The Act on Assessment Procedure in the Payment of Unprompted Taxes, which entered into force on 1 January 2017, also contains provisions on tax audits. "Good tax auditing practice" is a guideline issued by the Tax Administration, describing the progress of the good tax auditing process and what constitutes good practice. The guideline is also observed at control visits that are not as thorough as tax audits.
It is the Tax Administration's aim to carry out the taxation that falls within its authorisation in a professional, reliable and impartial manner. Assessment and debiting of taxes are based on information furnished by the taxpayers themselves and by third parties. We organize taxation in such a way that, in addition to actual taxes, it causes as little cost and inconvenience as possible to organisations’ financial operations. To ensure that taxes are collected in the correct amount and at the right time, we employ a number of control measures. Tax control protects the interests of the tax recipients and guarantees that the tax burden is carried fairly and equally by taxpayers. Tax audits also strive at better taxpayer compliance so that the taxpayers' capability and willingness to take care of their tax obligations can improve.
The procedures consist of an investigation of whether correct and sufficient information has been provided for the purposes of taxation and fulfilment of payment obligations. Audits cover the type and extent of the activity in question, as applicable, the way in which it has been entered in the accounts, and whether the information in the accounting records has been reported correctly to the Tax Administration. This way, the overall reliability of accounting is put under scrutiny.
If the taxation has been based on inadequate or incorrect information, it will be adjusted accordingly. If only minor errors have occurred, the taxpayer may also be requested to correct the error themselves. Fair and equal taxation requires that corrections are also made in favour of a taxpayer whenever necessary. Similarly, during an audit, advice and guidance are given and comparative data on other taxpayers is gathered.
Through tax audits, also the effect and operation of tax legislation is monitored and a basis for proposed improvements to the existing legislation is provided.
Taxpayers are selected for audit through tax risk analysis. All natural and legal persons in Finland, both Finnish and foreign, can be audited, as can their status as taxpayers. A specific area, work site, or place of business can also be audited, e.g. in order to identify potential taxpayers.
Audit scope varies from full audits to partial audits and from restricted-scope audits to audits where information for purposes of comparisons is gathered. The tax audit is performed to the appropriate extent. The extent is determined on the basis of an advance assessment and factors becoming evident during the audit. An audit may cover one or several tax categories, tax risks or such transactions that are relevant to taxation of the taxpayer. It covers a period that has been determined as the most relevant. Besides taxation itself, a tax auditor can review other matters within the Tax Administration's competence during an audit, such as payment control, debiting of tax and collection issues.
A tax audit may be carried out simultaneously with action undertaken by other authorities. Such action may include a pre-trial police investigation. This does not affect the work of the tax auditor, who acts under the powers bestowed on him by tax legislation.
2 A tax auditor's powers and responsibilities
The Tax Administration is the competent taxation authority. With a mandate covering all regions of Finland, its Corporate Taxation Unit is in charge of the taxation and other tax monitoring as well as the control of corporate entities. The Individual Taxation Unit is responsible for the taxation of other taxpayers. In the Corporate Taxation Unit, the tax audit is the responsibility of the five regional operating units and the Large Taxpayers’ Office. Provisions on this division of work have been issued by government decree and in more detail by the Tax Administration’s rules of procedure.
Tax auditors are Tax Administration officials assigned to auditing duty. They must provide proof of identity if needed and explain their powers and responsibilities to the taxpayer. They are independent and impartial. Provisions on their legal incapacity are contained in the Administrative Procedures Act. The tax auditors must base their proposals and conclusions on careful examination of all relevant matters and on the facts arising from them.
The documentation of a taxpayer's tax assessment is confidential information. Therefore, a tax auditor is bound by professional secrecy regarding all the audit documents. The Tax Administration may disclose confidential documents and details only to parties concerned or to other parties authorised by law.
The general provisions on the responsibility of civil servants apply to tax auditors. Tax auditors are responsible for their actions jointly together with the tax office they work for, and the latter is primarily liable for any damage or loss caused by its tax auditors. It is the tax auditor's duty to ensure that the audit has been carefully carried out and that all relevant matters are covered. The tax auditor is also responsible for ensuring that the information contained in the tax audit report and any tax adjustment or debiting decision prepared on the basis of the report is correct and adequate. All information must be disclosed as extensively as has been examined by the taxi auditors.
3 Duty to disclose information for purposes of tax audit
The taxpayer's duty to disclose information and material for the purposes of a tax audit is extensive. Besides actual accounting records, all other materials and assets that might have a bearing on taxation must be disclosed. The tax auditor decides what these materials and assets are. Any materials stored electronically must also be disclosed.
Accounting records and other materials subject to disclosure must be provided for a tax audit even if they contain confidential information from the taxpayer's point of view.
3.2 Third parties
Information required for an audit may also be acquired from sources other than the taxpayer. Comparison data from third parties is used to verify that the information in the taxpayer's accounting records is correct. The Tax Administration is entitled to such information under the conditions laid down in legislation. Some of the information is received from tax returns, but other information is obtained by a written request or by carrying out audits with the specific objective to gather comparison data.
Anyone receiving an enquiry from the Tax Administration is required to provide the information needed for the taxation of another taxpayer. The question must be specific enough so that the recipient is able to provide the information. The enquiry may concern an issue on which the third party has a right to refuse to give testimony by law. However, this information must be provided if it has a bearing on taxation and is financial in nature.
Government authorities and other public bodies may also be asked about information in connection with a tax audit. The information in question may concern an issue on which, under the law, testimony may not be given because of the authorities' confidentiality obligation. However, this information must be provided if it has a bearing on taxation and is financial in nature.
Under tax treaties and official assistance agreements, as well as under the current EU legislation, information may also be obtained from and given to the tax authorities in other countries.
4 Time and place of tax audits
Taxpayers are usually informed about an upcoming tax audit in advance. If possible, their wishes are taken into consideration when the decision is made on when to begin the audit. When there is a special reason, a tax audit can also be carried out without advance notification.
The tax audit is carried out in the premises of the taxpayer, the Tax Administration or an accounting company, depending on which is the most appropriate location. Also here, the taxpayer's wishes will be taken into consideration.
If the tax audit is carried out in the premises of the taxpayer or an accounting company, the taxpayer must provide the appropriate facilities and tools and, if necessary, personnel to assist in practical matters. When the audit is carried out elsewhere, the taxpayer must bring the material to be audited to the place in question.
5 Carrying out a tax audit
5.1 Preparing for an audit
Before the tax audit, the tax auditors examine the information already collected by the Tax Administration and available from other sources. The documents and data to be examined in advance include the tax returns filed by the taxpayer, payment control data, tax recovery data, comparison data, advance rulings from the tax authorities, information from various registers, and documentation of transfer pricing (in transfer pricing audits). The tax auditors must also familiarise themselves with the previous tax audit report on the taxpayer and the taxation practice and case law applicable to the taxpayer’s sector.
5.2 Auditing in an electronic environment (e-auditing)
In computer-assisted audits (e-audits), the tax auditors utilize the company’s financial and accounting data kept in electronic format. The company must provide its accounting data in a format that permits the establishment of an audit trail. Auditors follow the Tax Administration's rules on data security and confidentiality when handling and storing the data.
Computer-assisted audits allow for easier, faster audits: they minimize the time spent at the audit location. Audits may sometimes be conducted entirely on the basis of electronic documents without any visits to the company's premises.
5.3 Initial meeting
Whenever possible, a tax audit starts with an initial meeting with the taxpayer or their representatives and possible assistants. At this meeting, the aims and procedure of the tax audit are explained. The tax audit team also seeks to build a picture of the taxpayer's business operations and accounting, as well as the manner in which the customer has managed its tax affairs.
The following are among the issues that may be addressed at the initial meeting:
- Type, extent and special characteristics of the business operations;
- Affiliated companies and their locations;
- Ownership and each owner's participation in business operations;
- Owners' other business affiliations;
- Persons responsible for tax and accounting matters;
- Tax risks and categories covered in the tax audit and the emphases within them;
- Priority periods subject to tax audits;
- Auditing of the company's foreign places of business, subsidiaries and other affiliates;
- Preliminary time plan for the audit.
At the initial meeting, practical arrangements are also settled, such as the audit schedule and the use of the workspace.
After the initial meeting, or later during the audit, the auditors may also visit the office and other company premises and conduct interviews with the employees if necessary.
Typical matters examined in a tax audit:
- Do the facts about company business operations and the records found in its accounting match?
- Do tax returns, information returns, and company accounting records match?
- Does the company comply with the requirements of tax legislation?
The materials relevant to each tax risk and tax category are examined to the extent that is essential in view of the scope of the tax audit. They include the annual accounts, general ledgers and journals, vouchers, dispatch documents of goods, transfer pricing documents, minutes of company meetings, employment contracts, commercial contracts, standing orders, correspondence, and internal accounting system specifications and instructions.
5.5 Investigation of tax issues and giving guidance
The interests of both tax recipients and taxpayers must be equally considered when conducting a tax audit. The aim is to settle any tax questions and problems as thoroughly as possible already during the audit. This can be achieved through an open dialogue between the parties.
The tax auditors must examine the questions and problems at hand to the extent that is necessary and practical. The representatives of the taxpayer are requested to provide clarification in speech and in writing. Where more important tax problems or matters requiring interpretation are in question, the auditors may give taxpayers a written demand for clarification, displaying the suggested adjustments of the taxpayer's taxes and reasons for it. The main purpose of the clarifications is to ensure that the tax audit report and the taxation decision, tax adjustment decision or debiting decision arising from the report is based on correct information. It is the interest of both the Tax Administration and the taxpayer that all essential issues are clarified during the early stages of the audit.
In addition to turning to the taxpayer, the auditors may demand clarifications from company shareholders, employees, and from other parties.
To support their findings, the tax auditors may also request information from other sources, such as registers, other authorities, financial and insurance companies, or the taxpayer’s business partners.
They are also entitled to use cameras and video recording devices to gather information. In this case, close attention is paid to the general legal requirements governing the protection of citizens' privacy and to the confidentiality requirements of documentation (as laid down in the Act on the Openness of Government Activities (Julkisuuslaki 621/1999), and Personal Data Act (Henkilötietolaki 523/1999)).
The taxpayer must help to settle matters to the best of their ability. During an audit, the taxpayer is provided with an opportunity to be heard regarding the audit findings that may lead to taxation measures. This is known as a hearing, and in it the taxpayer is given an opportunity to give an explanation or express their opinion, orally or in writing. The main duty to provide information lies with the party to a transaction or other legal action that is in the best position to do so. The taxpayer is generally liable to provide information if the other party to a transaction does not live in Finland (or has no tax residency in Finland), and the tax authorities are unable to acquire sufficient information on that transaction, or on the other party, under an international treaty and the EU legislation.
In good tax auditing practice, the tax auditor must offer the taxpayers guidance during tax audits. Guidance may be given orally or in writing, as part of the tax audit report. In important matters and matters in which there is room for interpretation, the taxpayer is instructed to seek a preliminary ruling from the Tax Administration.
5.6 Closing meeting
Whenever appropriate and possible, a closing meeting is held with the taxpayer or their representatives and possible assistants after the materials have been audited.
In the closing meeting, the auditors discuss with the taxpayer the findings and the ways to resolve any unsettled issues. Any findings made in the audit are described as fully as possible. In cases of tax assessment by estimation, the grounds for applying this procedure must be explained to the taxpayer at the closing meeting if possible.
The taxpayer is also informed of further action that will follow and of the preliminary schedule. The taxpayer is informed on any tax debiting, tax adjustment, payment arrangements, or relief measures and on the appeals procedure.
6 Tax audit report
After completed tax audit, a tax audit report must be prepared unless there are special reasons not to do so. It enumerates the findings that affect taxation, and details measures to be taken on account of the findings.
Tax audit reports are prepared without undue delay. If the report is delayed substantially because more information is needed or for other reasons independent of the taxpayer, the taxpayer is notified.
A tax audit report contains, as appropriate, the following details:
- Information on the taxpayer and general information on their business;
- Information on audit procedure and scope;
- Audited accounting records and other materials;
- Information on each tax category and the findings relating to it, laid out in different sections;
- A description of the matters for which the taxpayer gave clarifications or explanations during the audit. If the taxpayer’s views were dismissed, the grounds for this must also be given;
- Any grounds for the taxation, tax adjustment or debiting decisions made and the guidance provided;
- Names and positions of the tax auditors who carried out the audit and of the other participants involved in it.
The extent and depth of the matters and circumstances described in the tax audit report depend on the matter and the tax category concerned. For example, tax audit reports on transfer pricing must contain a detailed analysis of the following matters (especially when increases in the taxpayer’s income are proposed in the report): a) main operations, assets and risks of the parties to an associated relationship transaction or transactions (functional analysis); and b) definition of the arms-length price (comparability analysis). Enclosed with the report are detailed lists of findings by accounting period, by tax period and by type of tax dealt with in the tax audit report, and other documents that provide clarification on the issues at hand.
6.3 Audit memorandum
A tax audit may reveal facts that will lead to a tax offence case or require immediate precautionary measures. If the audit has not advanced far enough for a report to be compiled, the tax auditor writes a memorandum on the findings.
The memorandum will be sent to a tax attorney of the Tax Administration, who will then report the tax offence or carry out a precautionary measure. In such cases, the relevant legal provisions concerning the notification and hearing will be observed.
7 Action taken after a closed audit
7.1 Return of tax audit material
When a tax audit is over, the tax auditors give the accounting material and other materials in their possession back to the taxpayer.
When the tax audit report is drawn up, the taxpayer must be provided with an opportunity to be heard. This is arranged before any decisions are made on taxation or on debiting measures. Taxpayers are always given the opportunity to be heard when the tax audit report proposes taxation or debiting measures.
Advance notice of at least two weeks should be given to the taxpayer before a hearing is held if there is no special reason for a shorter period. For a justifiable reason, the time that the taxpayer has for giving a response may be extended.
The auditors send the tax audit report, enclosed with a request to the taxpayer for providing a response, to the taxpayer or their representative, or in the case of a bankruptcy, to the administrator of the estate, or in the case of a limited or joint partnership, to the responsible partners. If the recipient fails to receive the report, or fails to provide a requested response, it is not treated as a circumstance that would legally prevent the tax authorities to make a decision on taxation or debiting measures. The tax auditors make the necessary changes to the tax audit report on the basis of the response.
7.3 Tax adjustment, debiting or tax refund
After the taxpayer's hearing about the tax audit report is closed, a decision is made by the competent unit (the Corporate Taxation Unit or the Individual Taxation Unit) on tax adjustment, debiting or the refunding of excess tax, as proposed in the tax audit report and on the basis of the information otherwise obtained by the tax auditors. When tax is overdue, late payment interest is added to the overdue amounts and the tax may additionally be increased.
The debited amounts must be paid by the due dates given on the bank transfer form. The amounts must be paid even if the taxation decision had been appealed against, unless a prevention or a stay of enforcement order has been issued.
7.4 Payment arrangements
In some cases the Tax Administration can grant a taxpayer payment arrangement, or partial or full exemption from the payment of the tax. The conditions for payment arrangements are provided by law.
A decision made on the basis of a tax audit report can be appealed against to the Tax Administration or an Administrative Court, depending on the tax category concerned and the date on which the tax debiting decision was made. Instructions for appeal are enclosed with the assessment decision.
8 Collecting comparison data; audits with the specific objective to gather comparison data
The conclusions from any tax audit can be used as comparison data in the taxation of other taxpayers, and for purposes of determining the tax position of another taxpayer.
The Tax Administration may also conduct the tax audit for the sole purpose of obtaining comparison data for taxation purposes. They may concern any sector of business, and all kinds of businesses corporate entities. Since 2011, it has also been possible to carry out audits in the companies of the credit and financial sector with the specific objective to gather large amounts of comparison data without identifying the taxpayers concerned. The data gathered may not only concern specific individual or corporate taxpayers but also parties who are not identified, and data amounts do not always have to be known in advance. Typically, the comparison data audits that involve large amounts of data are computer-assisted (for more information, see chapter 5.2). Agreements may be made between the tax auditors and the companies to be audited that they deliver a set of data to the Tax Administration.
A copy of the tax audit report prepared of the comparison data audit is also sent to the company or corporation submitting the data. Auditors must follow the data security and confidentiality rules of the Tax Administration when handling and storing the data.
9 Legal provisions on tax audit
Act on Assessment Procedure
Tax audits. At the request of the Tax Administration, the taxpayer must, either during or after the tax year, present for auditing in Finland his or her bookkeeping, notes and any other material and property related to his or her business or other income earning activities that may be required in taxation or when processing an appeal regarding taxation. (520/2010)
Subject to special conditions, a tax audit report must be compiled for the tax audit performed.
Further provisions on the tax audit procedure and the material and property disclosed for audit are given by decree.
See sections 2-4 of the Decree on Assessment Procedure, Ve 302.
Special reporting obligation of third parties. If the Tax Administration so requests, anyone must, on the basis of a name, bank account number, account transactions or other similar identification, provide information that may be needed for the processing of a matter concerning the taxation of a taxpayer or appeal and that is contained in the documents in the possession of the taxpayer in question or is otherwise known to the taxpayer in question, unless the taxpayer in question has the legal right not to submit evidence in the matter. However, information on a financial position of an individual or corporation that is relevant to taxation must be provided in all cases.
Special reporting obligation of the authorities. Central and local government authorities and other public corporations must, when the Tax Administration so requests, provide or disclose for audit the information that may be needed for taxation or appeal and that is contained in the documents in the possession of a public authority or other public corporations or is otherwise known to them, unless the information concerns matters in which no evidence may be submitted under law. However, information on a financial position of an individual or corporation that is relevant to taxation must be provided in all cases.
Central government authorities must, when the Tax Administration so requests, submit opinions for taxation and provide assessments in matters coming within their purview.
Comparison data audit. A tax audit can also be performed for the express purpose of collecting information that can later be used in other taxation of the taxpayer (comparison data audit).
Decree on Assessment Procedure
Tax audit procedure. The taxpayer must be notified of the time and place of the tax audit in advance, unless there are specific reasons for acting otherwise. During the tax audit, the taxpayer must, if possible, be provided with information on the aims of the tax audit, the tax audit process and additional measures and given the details of the audit findings. If necessary, the taxpayer must also be provided with guidance and advice in taxation matters.
The tax audit report must be prepared without delay. The tax audit report must detail the course of the tax audit, the audited material, issues relevant to taxation, guidance provided through the audit, clarifications submitted by the taxpayer, applicable law and the conclusions made by the tax auditors and the basis for them.
After the completion of the tax audit report, the taxpayer must be provided with an opportunity to be heard within a reasonable time. During the hearing, the taxpayer must be told in which issues clarifications are required.
Material and property disclosed in the tax audit. All material and property related to business or other income earning activities must be disclosed for audit in the tax audit. The material means the annual accounts book, balance sheet itemisations and other accounting documents, accounting framework (with entries concerning the period of use), accounting plan, description of method for electronic accounting, receipts, correspondence and other bookkeeping data, notes, agreements, promissory notes, minutes and other accounting material. The obligation to disclose material concerns written and graphic material (document) and storage media the contents of which can only be read, viewed, listened to or otherwise understood through technical means (technical recording). Property means stocks and other assets related to business or other income earning activities.
The party with the obligation to disclose material must also disclose for audit all other material and property that may be needed when their taxes are debited or appeals concerning their taxation reviewed.
Location of the tax audit. The tax audit is conducted in the premises of the taxpayer, the Tax Administration or an accounting company. If the tax audit is conducted in the premises of the taxpayer or an accounting company, the taxpayer must provide the public servant carrying out the tax audit with appropriate facilities, tools and assistants. The documents and technical recordings must be disclosed for audit or delivered to the location where the audit is carried out. At the authorities’ request, copies of the technical recordings must be produced for the use of the tax auditors, if this is necessary for the carrying out of the audit. (570/2010)
Tools mean typewriters, calculators, copying machines and computers, as well as other technical equipment with which the technical recordings can be converted into readable, viewable, audible or otherwise understandable format.
Act on Assessment Procedure in the Payment of Unprompted Taxes
Tax audits. At the request of the Tax Administration, the taxpayer must disclose for auditing in Finland their accounts, notes and any other material and property related to their activities that may be required in taxation or when processing an appeal regarding taxation.
Notwithstanding what is provided in subsection 1, in the case of VAT receipts and other material kept outside Finland in electronic format, as laid down in sections 209 n-209 q of the Value Added Tax Act, it is only required that the data can be accessed by means of a full real-time data connection and that the data can be converted into a plain language written text. At the authorities’ request, copies of the technical recordings must also be produced for the use of the tax auditors, if this is necessary for the carrying out of the audit.
The payer of a salary must disclose for audit in Finland the material concerning withholding and tax at source left to the payer by the recipient. Anybody in possession of material concerning withholding or tax at source that is required for the audit must disclose the material for audit.
The taxpayer must be notified of the time and place of the tax audit in advance, unless there are specific reasons for acting otherwise.
The Tax Administration must prepare a tax audit report of the tax audit, unless there are specific reasons for acting otherwise.
Further provisions on the tax audit procedure and the material and property disclosed for audit are given by Government decree.
General reporting obligation of third parties. The provisions contained in sections 15, 15 a-15 d, 16, 17, 17 a and 18 of the Act on Assessment Procedure apply to the general reporting obligation of third parties.
Payers of interest must provide the Tax Administration with yearly details of the interest on the tax at source laid down in the Act on Tax at Source on Interest Income and the tax at source collected from them. The party issuing a bond must also provide the terms and conditions of the bond that it has issued and the employer paying interest on the sums deposited in the personnel service office must provide the terms and conditions for the activity.
Employers must provide the Tax Administration with details of the employer’s health insurance contribution each year.
An authority granting a licence for a lottery must notify the Tax Administration of the licence.
The Finnish Medicines Agency must provide the Tax Administration with a monthly list of taxpayers paying the pharmacy tax and notification of the start and end of the tax liability.
The Tax Administration may issue more detailed regulations on the information to be provided, when the information should be provided and in what manner it should be provided or restrict the reporting obligation in situations that are of minor financial importance or of minor importance with regard to tax supervision.
Special reporting obligation of third parties. The provisions contained in sections 19 and 20 of the Act on Assessment Procedure apply to the special reporting obligation of third parties.
Payers of interest must, at the request of the Tax Administration, provide details of the taxpayers on whose interest income referred to in section 3 of the Act on Tax at Source on Interest Income no tax at source has been collected and the interest paid to them.
Sellers of investment gold must, at the request of the Tax Administration, disclose the material referred to in section 209 t of the Value Added Tax Act for audit and provide information on it.
A postal undertaking that is subject to the universal service obligation laid down in the Postal Act (415/2011) must, at the request of the Tax Administration, provide details of the postal orders and cash on delivery payments that have arrived for collection by customers and other payment transactions by post.
Special provisions concerning the reporting obligation of third parties. The provisions on parties responsible for reporting obligation contained in section 20 also apply to the parties with an obligation to report referred to in this chapter.
The provisions contained in sections 21, 22, 22 a, 23 and 25 of the Act on Assessment Procedure also apply to the general reporting obligation of third parties.
Tax Prepayment Act
Tax audit and reporting obligation. The provisions on tax audit and the reporting obligation contained in the Act on Assessment Procedure also apply to the tax prepayment procedure, the parties to it and the supervision of the tax prepayment procedure. The payer of payments subject to tax withholding must disclose for audit in Finland its accounts or notes and any material, items or property that may be needed in the carrying out of a tax audit, such as the withholding material left to the payer by the recipient. On request, the recipient of payments subject to tax withholding must also disclose the withholding material for audit. The provisions on the payer of payments subject to tax withholding apply to all those in possession of material referred to above.
Further provisions on the content and scope of the disclosure and reporting obligation and the audit procedure are contained in the Act and Decree on Assessment Procedure.
See sections 14-25 of the Act on Assessment Procedure, Ve 301; section 35 of the Tax Prepayment Decree, Ve 202.
Tax Prepayment Decree
Tax audits. The provisions on the disclosure obligation of the taxpayer and its scope and content contained in sections 2 and 3 of the Decree on Assessment Procedure also apply to employers and other payers of salaries.
See the Decree on Assessment Procedure, Ve 302.
Value Added Tax Act
(325/2003) At the request of the Tax Administration, the taxpayer must disclose for auditing in Finland their accounts, notes and any other material and property related to their activities that may be required in taxation or when processing an appeal regarding taxation. (529/2010)
Notwithstanding what is provided in subsection 1, in the case of receipts and other material kept outside Finland in electronic format, as laid down in sections 209 n-209 q, it is only required that the data can be accessed by means of a full real-time data connection and that the data can be converted into a plain language written text. At the authorities’ request, copies of the technical recordings must also be produced for the use of the tax auditors, if this is necessary for the carrying out of the audit. (399/2012)
Subject to special conditions, a tax audit report must be compiled for the audit performed.
Further provisions on the tax audit procedure and the material and property disclosed for audit are given by Government decree.
See section 10 of the Value Added Tax Decree, Ve 502.
Section 169 a
(350/1995) The audit can also be performed for the express purpose of collecting information that can later be used in other taxation of the taxpayer (comparison data audit).
Value Added Tax Decree
(1768/1995) The material that must be disclosed for audit referred to in section 169 of the Value Added Tax Act means the annual accounts book, balance sheet itemisations and other accounting documents, accounting framework (with entries concerning the period of use), accounting plan, description of method for electronic accounting, receipts, correspondence, notes, agreements, promissory notes, minutes and other accounting material. The obligation to disclose material concerns written and graphic material (document) and storage media the contents of which can only be read, viewed, listened to or otherwise understood through technical means (technical recording). The property disclosed for audit means the stocks and other assets connected with the activities. If necessary, all other material and property must also be disclosed for audit.
The tax audit is conducted in the premises of the taxpayer, the Tax Administration or an accounting company. The audit may take place before the end of the accounting period. If the tax audit is conducted in the premises of the taxpayer or an accounting company, the taxpayer must provide the public servant carrying out the tax audit with appropriate facilities, tools and assistants. The documents and technical recordings must be disclosed for audit or delivered to the location where the audit is conducted. At the authorities’ request, copies of the technical recordings must be produced for the use of the tax auditors, if this is necessary for the carrying out of the audit. (571/2010)
The tools referred to in subsection 2 above mean typewriters, calculators, copying machines and computers, as well as other technical equipment with which the technical recordings can be converted into readable, viewable, audible or otherwise understandable format.