Deloitte: Risk Mitigation in Corporate Audits and Prevention of Criminal Proceedings

Deloitte Legal has released an article focusing on risk management during corporate audits, specifically addressing how to prevent the initiation of criminal proceedings.

The article highlights that the risk of initiating fine or tax criminal proceedings can arise as early as the receipt of an audit order. Such orders may cover audit periods for which the normal statutory limitation period has already expired, and changes can only be made if there is evidence of gross negligence in tax evasion or tax fraud.

Furthermore, Deloitte points out that numerous situations can occur during a corporate audit that warrant anticipation of potential criminal proceedings. For example, requests for unusual documents or information not directly related to the tax base, but to facts that could be relevant to offenses or tax fraud, are significant risk factors.

Deloitte recommends implementing corresponding training and specialized processes for companies. These processes should be integrated into existing Tax Compliance Management Systems. The goal is to promote an efficient audit process while minimizing tax criminal and fine-related risks, particularly in light of the new regulations under § 153, paragraph 4 AO.

The guidance emphasizes that upon receiving an audit order, it is crucial to agree with the tax authorities on the future handling of potential correction requirements and audit periods. This reduces the risk of accusations of tax fraud due to the failure to promptly report corrections.