– Posted on 21 June 2013 at 22:27

by Attorney-at-law Luisiana Dobrinescu, Dobrinescu Dobrev SCA

In the 12 years of experience as lawyer specialized in the fiscal law, I have attended many fiscal inspections. I have learnt a lot of tax procedure by standing next to the inspectors and I have become familiar with their way of seeing the issue. Nevertheless, each time a new fiscal inspection begins, my heart misses a beat.


Firstly, the fiscal inspection offers the opportunity to have two persons that defend different interests (the taxpayer – its economic interest, and the inspector – the interest of the most important creditor, the state) standing face to face.

It is in the first place a psychological challenge – the fiscal inspectors come with their suspicion with respect to correctness of the taxpayer (in the deeds and in their conduct during the inspection), and the taxpayer waits for them with the preconceived idea that no matter what it does, it cannot be right…

Most times, not the technical issues, but the psychological component is the one that impairs the fiscal inspection, leading to extreme situations: abuses of authority on the part of the fiscal inspectors, in the vain attempt to prove that they are right, pressure and intimations to the higher fiscal bodies on the part of the taxpayers, so as to prove that they do not accept to be trampled underfoot…

Statistically, almost 50% of the criminal intimations that I dealt with in practice and which occurred as a result of a fiscal inspection (submitted either by the inspectors or by the taxpayer) were due precisely to the tense relationship and, in particular, to the communication between the taxpayer and the inspectors.

The first stage of the fiscal inspection: the delivery of the fiscal inspection notice

In most cases, the fiscal inspection is announced by delivering the inspection notice. In case of a dawn raid ordered as a result of the settlement of the appeal or following a request of the taxpayer (for instance the VAT reimbursement claim), it is not mandatory to deliver a fiscal inspection notice. The fiscal inspection notice is delivered at least 15 days before the commencement date of the inspection. This period of time is useful:

for the submission of rectifying statements – if the case (for the period of the inspection no rectifying statements may be submitted and no corrections of material errors may be requested);

for the submission of the statements that were omitted (in order to reduce the sanction);

in order to request a postponement of the commencement of the fiscal inspection. According to the Fiscal Procedure Code a taxpayer may request once the postponement of the commencement of the fiscal inspection, for objective reasons.

It is very important to carefully read the fiscal inspection notice announcing the object of the inspection and its duration.

An experienced accountant or lawyer knows how to read such inspection notice between the lines, so as to be aware of most documents that will be requested by the inspectors – at least in the first part of the inspection. The manner in which an inspection begins is very important for the indication of the way in which it shall continue. If in the first days of inspection the taxpayer is completely disorganized and cannot offer a minimum documentation for analysis, the chances for things to get tense are considerable…

Therefore, in the 15 days prior to the commencement of the fiscal inspection, prepare for each fiscal period the main statements related to the taxes and duties that are subject to the inspection, together with the balances (at least quarterly). An excerpt – or even the history of the company – has to be requested from the Trade Registry. This is the time when the taxpayer makes its own inventory of the irregularities: it is the last moment for the registration of the working points, the update of the headquarters, the extension of the directors’ mandate, the submission of rectifying statements, etc.

Furthermore, organize the records of the agreements (with suppliers and clients) in order to be consulted by the inspectors.

Following the review of these agreements, you will also become aware of the situations in which you have to bring additional supporting documents (especially for proving the provision of services that you benefitted from). Reports, worksheets, delivery-receipt minutes, photos, electronic correspondence, may all serve as evidence.

The commencement of the fiscal inspection

The first step of the fiscal inspection will consist in its registration with the Sole Control Register.

The inspection may concern only the objectives mentioned in the inspection notice.

The first advice for a more quiet inspection is to set ourselves a calm and reserved conduct, and at the same time respectful in relation to the public authority represented by a fiscal inspector.

Personally, each time I take heart at the beginning of an inspection, saying to myself that if every person does his/her job conscientiously, correctly and with no conceit, things have to be right.

Similar advice is given also for the representatives of the tax authorities: in the exercise of the state authority, they should not leave room for pride and ambitions. Each of the two parties must be aware that it may be equally subject to error and that its acknowledgement may only bolster the trust in the judgment and discernment of each party.

At the beginning of the inspection you may request confirmations from the inspectors: for instance, with respect to the documents that they wish to be translated (at least for illustration purposes). This way, both parties gain time.

In addition, in case your activity is not very common, ensure a sufficient technical understanding thereof. It is impossible for the fiscal inspectors to know all types of activities they inspect. A correct and complete understanding of the activity and of the internal method of operation may save a lot of things.

Make sure you benefit from specialized assistance: the accounting, the tax consultant, the lawyer. At least once a week discuss with the fiscal inspectors on the status of the inspection. Things may be remedied also under way, and this should not be viewed as unlawful.

For instance, invoices may be corrected only in the period of the fiscal inspection, so as not to result in negative consequences upon the deductibility of the VAT expenditure.

Likewise, in case of the absence of the VAT notice or of an agreement or an addendum modifying a fee, it is not illegal to contact such supplier and to prepare such agreement/addendum/notice.

Completion of the fiscal inspection

As regards the procedural time known as final discussion with the taxpayer, it should not occur without having received in advance the draft fiscal inspection report. In case the conclusions of this report are worrisome, make sure you benefit from specialized assistance. Do not forget that the time of the final discussion with the taxpayer marks the end of the fiscal inspection.

After this, the only way to change the conclusions of the inspection is the appeal. It is advisable that the legal counsellor/lawyer of the taxpayer be present when drafting the appeal as well, in order to ensure the compliance with all procedural rigour, including for a correct wording of the count of the appeal.

Nevertheless, it should not be omitted that the submission of the appeal does not suspend the performance of the administrative act.

The suspension of the performance may be requested separately, after depositing a maximum bail of 20% of the amount challenged. In practice, the bail is set between 1% and 10%.

Luisiana Dobrinescu is a founding lawyer of SCA Dobrinescu Dobrev, a law firm specialized in fiscal law and litigation (commercial, civil and contentious administrative) and writes articles for where she shares some of her business experience.