In the US, more than 17% of large corporations being audited in 2012, says MarketWatch.
This figures set to rise this year – in South Africa too, where SARS regularly conducts audits to detect and deter non-compliant behaviour in companies, says FSP Business
Because facing a tax audit
doesn't automatically mean you'll end up paying SARS thousands.
In fact, if you know what SARS is looking for you can prepare for a tax audit
today, especially if you know the type of audit SARS will be conducting.
If it's a refund audit, this is a desk audit (meaning it's performed at SARS' offices), so there's little that you need to do from your side to prepare for it.
The refund audit is triggered when SARS gives you a refund, with the auditor checking if the refund is legitimate, that you were given the correct amount and that it was paid on time, explains The Practical Tax Loose Leaf
Alternatively, SARS may want to check your records in a record audit known as the field audit.
This is an audit of your records, which is carried out at your premises and usually specific to
a certain tax
type, like employees' tax
Two ways to prepare for your SARS tax audit, no matter the audit type!
For both of these types of audit, all you need to do is back up that all your business tax
return calculations have been done correctly and that you're not seen as a tax
evader by making sure every calculation is recorded.
Then, also keep these records for the minimum prescribed period of five years, in case SARS decides to do a tax audit
of your business, explains FSP Business
It's the easiest way to prove your compliance with SARS and survive a SARS tax audit
, whether it's conducted at SARS's offices or your own.