Who can represent the company towards the tax authorities during an audit ?

11 Mar 2019

In a recent judgment of 25 January 2019, the Supreme Court takes a clear position on which person qualifies to represent a company towards the tax authorities in the case of an (announced/unannounced) audit.

Announced or unannounced audits

The tax authorities can conduct an announced or an announced audit. During these audits, the tax authorities can ask the taxpayer to present the books and other relevant documents, and assess these documents. Moreover, they can also ask the taxpayer for access to and copies of data.

When a company (a legal person) is subject to such an audit, the question that arises is by whom the company (legal person) should be represented. In other words, who can be the spokesperson of the company towards the tax authorities and who is allowed to provide the information requested? Is this the legal representative or can the company be represented by an(y) employee?

What does the Supreme Court say?

In its judgment dated 25 January 2019, the Supreme Court provided a clear answer to the above questions. In the case concerned, the tax authorities had submitted a company to an audit. During that audit, an employee of the company assisted the tax authorities, provided them with all the requested information and copied data. The company/taxpayer later argued that the employee could not represent the company during the audit, and therefore the information had been obtained illegally.

The Supreme Court ruled that a legal entity can be duly represented during an audit by the following persons :

·         competent bodies of the entity

·         someone who is duly authorised (e.g. via a power of attorney)

·         people whom the tax authorities could expect to have such competence

The Supreme Court has thus adopted a rather broad interpretation. If an employee assists the tax authorities during an audit, the tax authorities can use the information obtained via this employee in order to assess the company. It is up to the employee to raise the representation issue to the tax authorities.

How can companies cope with this?

Companies should make sure that they have a policy in place, instructing staff and appointing the persons who can duly represent the company during an (announced or unannounced) audit and who are properly trained to cope with the audit.

If you have any further questions in this respect or seek assistance with drafting a policy or organising training for your personnel, please do not hesitate to contact Véronique De Brabanter, Luk Cassimon or your regular contact at the PwC Legal dispute resolution & tax litigation team.


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Véronique De Brabanter

Véronique De Brabanter

Senior Counsel, PwC Legal BV/SRL

Tel: +32 473 59 34 77

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