The first stage of the work involved in fulfilling the documentary obligation is the identification of related entities and transactions subject to documentary obligations.
We provide this service to entities operating in extended capital groups and carrying out many transactions with affiliates. While direct and indirect equity relationships in small capital groups are relatively easy to identify, the remaining categories of linkages require access to relevant databases, representations by particular individuals, etc.
Having prepared a list of related entities, we compile a list of transactions for which a documentary obligation arose in the years subject to potential tax audits. This phase includes an analysis of accounting records, commercial agreements, off-balance sheet transactions, as well as contracts of joint ventures and partnership agreements.
The provisions concerning the identification of linkages and transactions are unclear and require ongoing updating to current legislation and the changing approach of audit authorities. As a consulting company, we have both the expertise and the tools to provide services consisting in the identification of linkages and transactions.
According to the current provisions of the of the Corporate Income Tax Law, there are several types of linkages: equity links (direct and indirect), personal, family, organizational, property, employment relationships, etc.
The work leads to a compilation of a report itemising related entities and transactions for which the taxpayer is obliged to hold relevant tax documentation.