A tax audit is an inspection of the correctness of the tax accounting with the aim of identifying and hedging potential tax risks arising from violation of different requirements.

Furthermore, a tax audit is an efficient tool for optimising the tax liability, offering real options for improving economic results.

  • Special-purpose tax risk audits
  • Due diligence

We identify the risks inherent in the different tax areas, including, but not limited to, corporate income tax, value added tax, wage accounting, transfer pricing and transactions with non-residents. We audit the entire value chain of the business activities and, where necessary, specific sections or events.

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The exact scope of the audit depends on a combination of the customer’s expectations and the recommendations of our tax advisers. For example, a due diligence is, as a rule, conducted on the order of and at the expense of the seller. The service has been designed for customers set to sell their company or a part of the company, and provides an overview of the tax aspects in the seller’s (or the target company’s) financial and taxation model. A due diligence is thus prepared for the final buyer or potential buyers.

Tax audits produce a final report which provides:

  • an overview of the violations detected;
  • an overview of the issues identified as potential tax risks;
  • an assessment of the scope of tax liability in the issues identified or indicated by the customer;
  • recommendations for solutions and activities designed to reduce or eliminate potential tax risks.

In order to ensure the highest quality of service, the tax audits of different purposes are conducted by a team of experienced tax and legal advisers as well as authorised auditors on the basis of specially developed methodology.

The Estonian tax authority has significantly boosted the number of audits and inspections of different purposes. Given that extended audits of the tax authority disturb business activity, and considering the high rate of interest on tax arrears, imposed on the taxpayer with retroactive effect, companies that have not been audited for a long period of time should weigh the option of ordering a special audit from our advisers to prevent and alleviate potential problems, taking into account the specifics and bottlenecks of their particular business model.

Should you be interested in ordering a compliance audit, please do not hesitate to contact our advisors.

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Expert Kristjan Järve

Head of Tax services