A perfect document is not enough. Payer, you have to try harder!


Supreme Administration Court (SAC) has reconfirmed the trend from the last three years that even the formally correct accounting document with all the requested necessities does not prove, by itself, that the declared fulfilment was realised.  

The SAC has reconfirmed the not unequal position of the financial administration and payers. The payer is still not protected by keeping up any of the law-defined procedures, formal necessities or relying on the tax administrator’s obligations to prove the reality, which disproves the credibility, conclusiveness, correctness or complexity of accounting and other obligatory evidences. To the successful dispute of tax deduction or reduction of the income tax base, a relevant dispute is enough for the tax administrator with “sufficient doubt”, without any real evidence proving “their version” of the story.

In the case in question, the tax administrator successfully disputed the fulfilment of marketing costs. Nothing prevents the tax administrator in proceeding in the same way by any other fulfilments. The SAC agreed with the tax administrator that the existence of accounting documents, it means income documents from invoices, does not prove, by itself, that the declared fulfilments were really realised.  According to the court, it is necessary to acknowledge the cost by other means of proof documented by the payer. This means that the proof should show that the fulfilments documented in the invoices were really realised. The SAC said that there is no legal rule determining the tax subject on how many means of proof the payer should collect with regards to the tax cost. However, it does not liberate the payer from this obligation. The payer has to keep a trustworthy way to prove an accounting case in mind; especially it concerns higher amounts. Besides the accounting documents and contract documentation, it is necessary to keep other means of proof (delivery documents, transport documents, photo documentation, records, emails, records of meetings, and travel reports or a driver´s report book) by which it is possible to prove the real provision of the taxable supply during the period the tax can be assessed.

In this connection, the payer needs to deal with the fact that there is no criminally legal presumption of innocence in the contact with the tax administration but rather a little medieval way of – “guilty, until proven innocent that everything proceeded correctly”. We can protest again that we do not have to like it. However, pragmatically we cannot do anything other than to acclimatise to this practice and not to minimise the supportive proofs of significant sums.

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