Accounting: What You Should Do and Avoid Doing When Dealing with Revenue Department Inspections

Key Takeaways

• The Revenue Department typically notifies companies by official letter before an inspection, with the date, location, and purpose stated on government letterhead bearing the Garuda emblem.
• You can reschedule an inspection by calling the Revenue Department if you cannot make the original date, but never just ignore a summons.
• Ask any officer to present their ID when they arrive, and verify by calling the Revenue Department Call Center at 1161 before granting access to your office.
• Inspections fall into two types: confirming your business is legitimate (common for new companies) and auditing whether taxes were filed correctly.
• Only provide the documents you are specifically asked for, since volunteering extra materials like bank passbooks can raise new questions and extend the inspection.
• Have your accountant present for any tax-related inspection so they can explain your filing calculations on the spot.
• An under-declared income tax return costs a penalty equal to the missing tax, plus a 1.5% monthly surcharge capped at the tax itself.
• You have 30 days from the assessment notice to pay or to appeal, and a written request for a lower penalty has to go in before that notice arrives.