Aspects of the auditing process in Honduras

By: Aida Sierra

The Revenue Administration Service (SAR), has within its attributions to carry out procedures of Determination to the taxpayer that consist of verifying the existence of a generating fact or the information presented by the taxpayer in its declarations. These procedures may be integral or partial, the ex officio determinations are also called audits and below is a brief description of what you should know about it:

The audit procedure is detailed in the Tax Code in force, and must be initiated through the notification of initiation of proceedings to the taxpayer, which is signed by the head of the Tax Administration or, by the person to whom he/she delegates this management; the notification document must contain:

a) Scope of the Audit, i.e. whether it is a comprehensive or partial audit;

b) Details of the taxes subject to audit;

c) Legal grounds for the audit order;

d) The tax periods to be covered by the audit; and,

e) Identification of the public servant or servants in charge.

All the actions carried out in the course of the audit and investigation procedure must be documented in minutes, including the actions in which the audited party directly intervenes, said document must contain:

(a) The Facts and omissions known to the auditors.

b) The points of convergence of the auditee during the auditing process;

c) The complete chronology and findings of the process;

d) The objections or rejections expressed by the taxpayer; and

e) The investigations or other facts related to the other actions and proceedings carried out in an audit process.

After the investigations have been carried out, and the necessary data and evidence have been obtained, a final record of the closing of the audit proceedings shall be drawn up; said document must be signed by the Auditor in charge and by the taxpayer, so care must be taken to be aware of the end of said process.

Once the field work of the auditing process has been concluded, the SAR Staff must issue a provisional proposal for regularization and liquidation within ten (10) working days after such conclusion, containing the adjustments or modifications to the self-assessment or declaration of the audited subject or the determination they consider appropriate in case there was no declaration, as well as the material and formal tax faults, indicating the facts, evidence and legal grounds, granting the taxpayer a term of fifteen (15) working days to express its conformity, which may be total or partial, or on the other hand, to allege what is convenient to its right. The taxpayer must have access to the entire file from the date of notification of the corresponding Resolution. The term established for the duration of this process in accordance with the Tax Code is eight months, extendable to six months.

The Tax Audit process must conclude with the notification of the corresponding resolution, which must be delivered and notified to the taxpayer, so that if it is the case it can be appealed according to the procedures and resources stipulated in the Tax Code (Reposition and Appeal).