Inspection activities, tax control, tax proceedings are described in the provisions of the Tax Ordinance Act.
Inspection activities are the least formalized, which does not mean that there are no threats here. On the contrary, as we know from the experience and the case law, tax administration commits tax (procedural) abuses, for example in relation to undisclosed sources of income or negligently declared loans.
Tax control is a separate procedure. In contrast to inspection activities, tax control should be officially initiated and completed. In the course of a tax control, it is verified whether taxpayers meet their obligations under the provisions of tax law. To this end, the tax authorities carry out meticulous evidence proceedings. The tax advisor acting in the interest of his principal should pay particular attention to whether the tax authorities collect evidence in accordance with the law, and should also submit their own evidence (if necessary).
Tax proceedings are a different matter. The tax authority may initiate it either spontaneously or as a continuation of the tax control. The tax proceedings provides for further accumulation of evidence. It may be anything that leads to the explanation of the case, but provided that it is lawful(at least in theory). For example, tax books, tax declarations, witness statements, expert opinions and many other materials and information can all be evidence. Tax proceedings, if not extinguished, ends with a tax decision, which can be appealed against by lodging an appeal.