Tax Audits of Individuals Operating Under B2B Contracts

The registered income lump sum has become increasingly popular over the last few years.

Preferential tax rates and a simplified model for accounting for social security contributions make it one of the most frequently chosen forms of taxation, especially among IT entrepreneurs.

However, tax preferences are often associated with increased interest from tax authorities.

The Head of the National Fiscal Information (DKIS) is increasingly refusing to give individual tax interpretations to taxpayers regarding the possibility of providing services under the B2B model (especially to those who act as board members and/or partners and B2B associates in the same company). This is because in many cases, according to DKIS, there is a suspicion of tax avoidance and the tax authorities are stepping up audits from month to month.

In order to prepare for a possible tax audit, entrepreneurs should take care to document their income in detail. Adequate preparation may allow an audit to be concluded quickly already at the stage of checking activities, thus avoiding more serious consequences. Cooperation with the office and the submission of good explanations can end the whole matter already at this stage.

It is important to remember that a negative outcome of a tax audit can lead to severe tax consequences for both the taxpayer and the company.