In general, APEH in 2008 will place greater emphasis on preventing tax evasion, on risk analysis and on rapid reaction to potential violations.
Priority audit areas:
The Tax Authority will target 20% of newly established companies without predecessors, selected on the basis of risk analysis, entities that change their registered office frequently, and taxpayers that share the same registered office, owners, managing directors or delivery agents.
Wealth audits focusing on individuals and their close relatives will also receive priority.
If an audit reveals wilful tax evasion that results in a major tax shortfall, the taxpayer involved can expect that any company he has an interest in will also be audited shortly.
The Tax Authority will place greater emphasis on auditing companies with high turnover but low payable VAT, extending audits to cover supplier- buyer relationships if necessary.
Invoicing arrangements that cause suspicion of carousel fraud, sales chains, exports to and imports from third countries, ecological taxes and the payment of duties on the receipt of assets free of charge will receive closer scrutiny.
APEH will also pay more attention to transfer pricing and to taxpayers that are taxed under the simplified entrepreneurial tax regime.
Audits will also cover cash management policies and the specific elements of inventories.
In addition to checking compliance with new provisions that have been introduced under new or amended legislation, compliance with VAT group rules and the mandatory introduction of the reverse-charge mechanism in connection with real estate services will receive special priority.