In retrospect by tax audit at four to five yearly intervals
The annual tax returns submitted by corporate and other business taxpayers are usually accepted as filed, unless they are obviously incorrect or illogical, or unless the taxpayer openly discloses that he has taken a position at variance with the known views of the tax authorities. However, the assessment notices issued will be provisional subject to fiscal audit.
Fiscal or tax audits are regularly conducted on all larger and medium-sized businesses. The German subsidiaries or branches of foreign concerns almost always fall into the fiscal audit net. Audit intervals and practices vary slightly by area and by tax office, although they are frequently carried out at five-year intervals, though sometimes only covering the past three years. Virtually every fiscal audit consists of a field visit lasting for several weeks (or longer in the case of large companies with complicated affairs) during which the books and records will be subject to a more or less intensive review. The auditor will discuss his findings with the taxpaying company and/or its tax consultants and then issue a formal report. This formal report is usually taken by the tax office as its basis for issuing revised assessments which then become final or binding unless an appeal is lodged.
There are a number of other defence mechanisms available apart from appeal to the courts, particularly in respect of the protection of interests of related-parties who are, or may be, affected by tax auditor contentions of profit shifts.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
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The New Turkish Commercial Code ("New Code") has been enacted and will enter into force in July 2012. One of the major changes brought by the New Code regards mandatory independent audits of corporations.
The law about payment of dividends has remained substantially unchanged for thirty years.
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