Support of inspections by regulatory authorities

Sooner or later, any business faces inspections conducted by regulatory bodies. And these are the consequences of such inspections that often constitute the greatest danger for the business.

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Each entity engaged in economic activities is obliged to observe a huge number of rules and regulations starting from the general ones such as tax and labor legislation and ending with specific norms that regulate a particular type of activity. Taking into account all the instability of the legislation, it should be understood that mistakes often occur due to ignorance, inattention or inexperience, and also because of a lack of sufficient competence. The identification of such violations by inspectors in the course of inspections becomes a reason for applying sanctions that can hit hard on profitability, lead to loss of assets, and even put the further existence of business into question.

In the media, there are regular reports about “enormous” amounts which companies are fined for. The size of such penalties does not often correlate with the significance of the violations which they are charged for.

Disputing fines of inspecting bodies is often complicated by the fact that the inspecting bodies have already collected a lot of evidence of violations committed by the business at the stage of inspection.

The practice shows that during the period of moratorium on inspections, business has got out of the habit of being inspected and lost its vigilance unreasonably, what many companies have already paid a heavy price for in early 2018.

The reason for such unpleasant consequences is the unprofessional preparation for the inspection. The risks can be minimized with the help of experienced consultants of Law Firm “Dominanta” by ordering the support of inspections by controlling bodies. We can begin our cooperation at any stage, whether it is a primary analysis of documents and identification of risks or during the inspection already, but the earlier stage you contact the attorneys to support the inspections, the more secure your future will be.

Cooperation with us will be unsophisticated and comfortable. Contact us – We will analyze the possible risks and the types of protection you need – We conclude an agreement – We will provide you with protection and support at all stages.

Good preparation is your ticket to success.

You should perceive an inspection as a fight in the ring – prepare in advance, carefully and always be on the alert.

It is very important to conduct an audit before inspection and to eliminate all violations which can be identified by inspectors, or to organize work in such a way that the possibility of their detection is kept to a minimum.

So, for example, the proper preparation in the part of the inspection by the State Service of Ukraine on Labor will not give an opportunity for the inspectors to take you by surprise and fix violations, and in relation to tax inspections, it will enable to identify and eliminate discrepancies in the accounting documentation, to restore the supporting documents, and sometimes to delay the audit for up to 90 days.

Companies and entrepreneurs must be notified on all planned control activities no later than 10 days.

In this case, such notification must be handed personally to an authorized person by express messenger or by mail.

All planned control activities should be coordinated with the State Regulatory Service and be stated in the plans for inspections posted on the website of this service and on websites of control agencies.

Unscheduled inspections can be carried out only on the grounds provided for by legislation for a specific controlling body, but the controlling bodies should not warn a company about conducting an unscheduled inspection.

At the stage of preparation for inspection, we will provide:

  • exercising juridical audit of documents prior to the inspection in order to eliminate and/or minimize risks;
  • determining the legal position of customer on specific issues in terms of the activities conducted;
  • analyzing requests for the provision of documentation for compliance with the requirements of legislation and necessary requisites as well as preparation of responses to them.

Clear definition of the scope for conducting inspection and monitoring of strict compliance with the legislation by the inspectors will make the inspection as comfortable as possible for you.

Admission to inspection is one of the key stages where it is necessary to make sure that the documents are prepared correctly, there are no grounds for refusing the admission to inspection.

Arriving inspectors should show their service certificates and provide documents entitling them to conduct inspections (the list of such documents differs depending on the controlling body and type of inspection).

For example: the representatives of the State Fiscal Service must provide a referral for each inspector and an order to conduct the inspection, while the Specialists of the State Service of Ukraine on Labor act on the basis of a referral for inspection.

A referral for inspection should specify:

  • the name of the business entity and / or its separate subdivision or the surname, first name and patronymic of the individual entrepreneur in respect of whose activities the inspection is carried out;
  • the location of the business entity and / or its separate subdivision;
  • the number and date of the order (decision, decree) which is the ground for the inspection to be carried out;
  • the information (position, name, surname, patronymic) about the official carrying out the inspection (if there are several persons, this information is indicated in relation to all persons);
  • start date and end date of the inspection;
  • type and form of the control activity;
  • grounds for conducting the inspection;
  • subject of inspection.

In the event that there are defects in documents of the controlling body that enable not to admit inspectors to examination on legal grounds, this fact is subject to mandatory fixation not only in the Act of non-admission, but with the help of photo and video recording means, if possible.

If there are no grounds for refusing the admission of inspectors to examination, it is necessary to determine the list of issues to be inspected and the list of documents to be provided to the inspectors. It should be noted that often inspecting one issue, the controlling bodies also try to identify violations that do not concern the subject of inspection, so in order to prevent this it is necessary to remember that documents not related to the subject of inspection can not be claimed by the inspectors and you are not obliged to provide them.

All inspectors must be registered in the visit log. You have every right to refuse admission to the inspection, if the person has not registered in the visit log, but you must notify the relevant agency about the fact of such refusal. It should be noted that according to the normative documents the period of such notification is limited to 3 days, but in order to prevent negative consequences, it is actually recommended to immediately notify about such facts in writing.

The inspectors have the right to a written request of documents relating to the issues of inspection. The documents should be better provided with the enclosed list in order to avoid the situation when inspectors ignore the “inconvenient” documents. It is recommended to present all explanations on the issues of inspectors in writing and to hand them over against signature.

At the stage of conducting the inspection, we will provide:

  • analyzing the legality of conducting inspections at the stage of admission of inspectors to examination (control of the powers of inspectors and the grounds for inspection), execution of the inspection log and identification of the possibility of non-admission for inspection with proper documentation;
  • preparing explanations on the issues of inspectors, legal justification for the position of the inspected entity;
  • identifying the positions of customer’s contractors according to the counter tax reconciliation;
  • controlling the observance of rights of the company under examination by inspectors during the inspection;
  • controlling the terms of conducting inspections and appealing the decisions on the extension of the inspection period;
  • supporting and controlling the provision of original documents for inspection.

Execution of inspection results and appeal against decisions of controlling bodies

In case of detection of violations, they should be recorded in inspection acts. At the same time, such Acts should clearly state a systematized statement of the violations revealed during the inspection by reporting their essence and with reference to specific clauses and articles of legislative acts as well as to primary documents which indicate the presence of such violations. The inspections acts executed by controlling agencies quite often do not contain the necessary and detailed information, and it gives rise to talk about violations committed by the inspectors and deprives the controlling agency to refer to facts not specified in the act in the future when the case is being tried in court.

There can be objections filed as to the inspection act, however, it should be noted that in respect to examination by the Sate Fiscal Service, filing such an objection may be grounds for a repetitive inspection of the taxpayer. Therefore, in order to avoid negative consequences, a balanced approach should be taken to writing such objections.

The decisions of the controlling body taken on the basis of the inspection results can be challenged, however, the timing and forms of challenge depend on the controlling agency.

At the stage of challenging the decisions of a controlling body, we will provide:

  • analyzing the Inspection Act for the presence of shortcomings and violations committed by inspectors;
  • preparing the evidence base and objections to the inspection act;
  • appealing against illegal actions of the inspectors committed during the inspection;
  • preparing an administrative complaint and/or a claim to appeal decisions;
  • representing interests of the client in court.

Trying to independently support the conducting of inspection, it should be remembered that in addition to the general rules applicable to all controlling bodies, there are many individual peculiarities in respect of each of them and all efforts on protection can be reduced to zero without knowing the nuances. Since the Cabinet of Ministers of Ukraine has approved a list of more than 20 state inspection agencies which are not covered by the moratorium on inspections, some of them may “come” to you in the near future, and therefore only by putting yourself in hands of experts in this area, you can be confident in the security of own business and boldly make plans for the future.

Owing to our protection, the risk of bringing clients to responsibility is minimized. Of course, this is possible only with an absolute knowledge of legal framework, knowledge of the subtleties of judicial practice, and understanding of the needs of our clients.

One should not forget that involvement in the process is also crucial, since any inspection is a stressful situation for the representatives of business, which leads to unfortunate mistakes, and therefore attracting external specialists capable of thinking soberly and clearly even under the pressure from the inspectors will guarantee the respect of your rights and interests during the inspection.

We are constantly taking care of improving the skills of our employees in order to provide you with a first-class result which will surpass all your expectations. The team represented by 6 attorneys and 5 lawyers possessing deep knowledge and vast experience in the sphere of appealing tax notices – decisions will ensure the protection of your rights and interests.

Law Firm “Dominanta” has a staff of specialists including 6 attorneys with many years of experience, 5 leading lawyers, specialists in accounting and finance with comprehensive knowledge and vast experience each in their field, which makes it possible to effectively provide complex protection and support for conducting any inspections, to form a unified strategy of actions and to maximize the chances for making a decision in favor of the customer. The key to the success of our team is professionalism and coherence acquired over time and as a result of the hard work of everyone.

Our lawyers are professionals in their field, and in each specific case they develop a strategy that minimizes the risks of your company and helps to avoid serious sanctions.

Call us on tel.and sign up for a initial consultation on issues of protection during inspections.