Minimise your tax risk by business partner due diligence
Many companies only realise the importance of verifying their business partners and the existence of related documentation during a tax authority audit, when they are required to present their contracting procedure and, for certain business partners selected by the tax authority, their due diligence documentation.
In order to enforce the right to deduct VAT, the tax authority always requires the recipient of the invoice to carry out a so-called "business due diligence procedure" [Section 168/A (2) of the VAT Act] and to provide the tax authority with the relevant documents during any tax authority audit.
The tax authority will consider the documents provided when assessing the enforceability of the right to deduct tax, together with the other evidence available, and will assess them as a whole.
As part of the service pertaining to business partner/company due diligence, RSM consultants examine whether the quality of the preliminary business partner due diligence procedure applied by taxpayer meets the requirements of the tax authorities and courts.
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