Minimizing the likelihood of state inspections during the liquidation of a legal entity

The decision on liquidation of a legal entity and its removal from the Unified State Register is made by the registering authority under condition of submission of certificates issued by tax authorities, customs authorities and state insurance company (Belgosstrakh) stating that the legal entity has no outstanding debts to the budget and unfulfilled obligations towards abovementioned bodies. These certificates are submitted on the basis of: 

  • information about the entity’s activity already available to the authorities; or 
  • the results of an inspection carried out by the authorities, and (or) audit report in case if the legal entity has concluded an agreement for provision of services on independent evaluation of activities of legal entities during their liquidation. 

The company is free to choose an auditor or audit organization among those that were granted the right to carry out independent evaluation. Auditors (audit organizations) must comply with the requirements established by resolution of the Council of Ministers of the Republic of Belarus dd. 04.07.2017 N 500 “On provision of services on independent evaluation by auditors of entities’ activities during liquidation (termination of activity)”. The list of auditors and audit organizations, which can be engaged by the legal entity to carry out independent evaluation for liquidation procedure, is available online at the website of the Ministry of finance of the Republic of Belarus. 

If your company decided to engage an auditor for carrying out independent evaluation of its activity for the purpose of liquidation, the following shall be noted: 

  • a contract for engagement of auditors must be concluded by the company before submission of request for liquidation to the registering authority; 
  • the request for liquidation must specifically mention that engagement of auditors took place; 
  • the results of independent audit evaluation in form of an audit report must be submitted to tax authorities, customs authorities and Belgosstrakh within 20 business days from the date of submission of request for liquidation to the registering authorities.

Therefore, tax and customs authorities, Belgosstrah have the right not to carry out inspections in case if they possess the results of independent audit revision and can submit certificates to the registering authority on the basis of this information, thus confirming the absence of the entity’s tax liabilities. 

However, there are certain cases when state inspections are inevitable even with an audit report at hand. Tax, customs authorities and Belgosstrakh will carry out inspections nevertheless in the following cases:  

  • when they have information about the entity’s activities, which contradicts the information indicated in the audit report; 
  • when the audit report reveals violations committed by the entity and the entity fails to remedy those violations within 30 business days after submission of request for liquidation to the registering authority; 
  • when the tax authorities previously within a period prescribed by law have made decisions on set-off and (or) return of the difference between the sum of tax deductions and the aggregate sum of calculated VAT, for the amount of more than 3000 basic amounts in total; 
  • when services on audit evaluations have been rendered by an auditor/audit organizations non-compliant with the requirements for auditors laid down by the law. 

In cases described above the company will face state inspections within the course of liquidation procedure even if it engages independent auditors. 
 

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