Control proceeding is a fiscal audit performed by tax inspection authority, whereas tax proceeding is a jurisdictional administrative action aimed at decisive determination of individual tax powers and duties.
Control proceeding is a form of fiscal audit, and not one of the three tax procedures regulated in the tax ordinance in chapters IV, V and VI. The subject scope of the tax proceedings extends to tax entities, whereas the subject scope of audit proceedings is broader. Tax proceedings are initiated on application or ex officio, whereas control proceedings are initiated ex officio exclusively. Tax proceedings lead to issuing a decision, whereas control proceedings may end up with control’s result. The provisions of tax ordinance governing tax proceedings have supplementary nature and are limited to the control procedures. Thus, fiscal control act refers to the tax ordinance in a limited way, in which the conduct of the inspection is not regulated by the law on the overall fiscal control.
The main purpose of tax audit regulated in the act of 28 September, 1991 on fiscal control (uniform text: Journal of laws of 2011 no. 41 pos. 214) is to protect the property rights and interests of the Treasury and to ensure efficiency of the enforcement of tax liabilities and other duties constituting the state budget or state funds. The aim of fiscal control is also to test the legality of property management of other state legal persons and to prevent and disclose crimes defined in articles 228-231 of the criminal code, committed by persons employed or serving in the organizational units subordinate to the minister responsible for public finances.
Among the tasks of the tax audit referred to in article 2 of fiscal control act, point 1) of this regulation establishes the control of accuracy of declared tax bases and accuracy of calculation and payment of taxes constituting state budget income, as well as other monetary claims of the state budget or state special funds.
By virtue of article 8 paragraph 1 pt. 1 - 3 of fiscal control act, the authorities of fiscal control are: the minister responsible for public finances as the supreme authority of fiscal control; general inspector of fiscal control office as a higher degree of authority over the directors of fiscal control offices; director of fiscal control office. Consequently, according to article 11 paragraph 2 point 3a and 3b of fiscal control act, the director of the fiscal audit office empowers inspectors and staff to conduct monitoring activities, issues decisions on matters specified in the law and issues the result of the control.
The fiscal audit, in principle, is conducted in accordance with the control plan (article 12 paragraph 1, tax ordinance). The plan is established by the directors of fiscal control offices in accordance with the tasks set by the general inspector of fiscal control office. Control procedures may also be conducted outside the control plan on the basis of gathered information, materials, or conducted analysis. Initiation of control procedure occurs exclusively ex officio in the form of provision (article 13 paragraph 1, tax ordinance). To initiate the control procedure, articles 282b and 282c of the act of August 29, 1997 - tax ordinance, should be applied respectively. The date of initiation of the control is the day of servicing the notification to the controlled (article 13 paragraph 2, tax ordinance).
Tax inspection authority may carry out tax inspection within the control proceedings (article 13 paragraph 3, tax ordinance). Tax audit is conducted on the basis of individual authorization granted by tax inspection authority (article 13 paragraph 4, tax ordinance). The initiation of tax audit takes place after the controlled is serviced with the authorization to carry out the proceedings. The authorization to conduct a tax audit is issued by the director of the fiscal control office and shall state: indication of legal basis; designation of authority control, date and place of issue, the name of the inspector, the names of employees performing control activities, as well as those referred to in article 13 paragraph 8, tax ordinance, if such persons shall be involved in control; service identity card number of the inspector and the authorized employees; designation of the controlled; indication of the date to begin and the anticipated date of completion of the audit; the scope of control; signature of the person giving the authorization, stating their position or function, and instruction on the rights and obligations of the controlled (article 13 paragraph 6 points 1 – 10, tax ordinance). The proceedings are carried out by the inspector together with authorized employees, upon presentation of identification cards and necessary identification marks (article 13 paragraph 7, tax ordinance).
Tax audit may also be initiated upon presentation of identification cards and identification marks and servicing the notification. In this case, the authority to conduct tax examination shall be served without undue delay but not later than 3 days from the date of initiation of control. The provision of article 284a of the act of August 29, 1997 - tax ordinance shall be applied appropriately (article 13 paragraph 9, tax ordinance).
