Meaning
Examination conducted by local taxation authorities to verify the accuracy of corporate filings and payment history. A tax bureau review often focuses on value added tax invoices, corporate income tax deductions, property tax records, and cross border payments to ensure compliance with the prevailing tax code. Authorities may select a company for this process through random sampling or due to inconsistencies in their automated risk assessment system.
Procedure checks ensure that the state receives the correct amount of revenue while identifying potential tax evasion.
Assessment Window
Officials typically request a wide range of documents including bank statements, purchase contracts, and payroll records. During the tax bureau review, the inspectors may visit the company premises to verify physical assets and interview accounting personnel. Inspectors look for discrepancies between the reported revenue and the volume of business indicated by other operational data.
Documentation Request
Findings of the review are summarized in a report that outlines any unpaid taxes, late fees, or fines. If the company disagrees with the results, it can apply for an administrative review or file a lawsuit in the local people’s court.
Settlement Outcome
Maintaining a high credit rating with the tax authorities reduces the frequency of these formal inspections.
