Does a taxpayer who has been subject to a tax audit or compulsory taxation run the risk of double penalty by undergoing a review of his entire tax situation at the same time? The procedure consists of scrutinizing the tax situation of a taxpayer by scrutinizing all of his expenses and income. The goal is to determine inconsistencies between the declared professional, agricultural, and property income and the lifestyle led by the taxpayer.
“There can be an offsite or onsite tax audit on documents only if a tax return is filed. Clearly, the inspector or auditor first checks a tax return”, explains Mohamed Fdil, tax expert and former Secretary general of the National Commission for Tax Appeals (CNRF). Thus, the tax authorities can only assess the overall income for taxpayers who have not filed their tax returns after the prior initiation of the ex officio taxation procedure provided for in article 228 of the General Tax Code (CGI) in the event of non-declaration of the overall income or of the property income.
Moreover, the selection of taxpayers, whether natural or legal persons, who will undergo an audit is neither random nor arbitrary. Their selection of taxpayers to be scrutinized often follows a completely automated procedure. It is a scoring system via a computerized platform set up by the tax administration and which leads to checking files with “high (suspicion) scores, indicative of a significant tax risk”.
In practice, each file receives a score which determines the type of check that will be carried out or indicates whether the taxpayer is in compliance with the legislative provisions on taxes. The system is continuously updated, rectified, and finetuned. Youtubers and other influencers had a “taste” of this system recently when they were finally scrutinized the tax authorities.
The review of the entire tax situation is triggered by the competent services when the overall annual income of the taxpayer (declared or taxed automatically or being exempted from filing a tax return) is not consistent with his expenses, which are listed in article 29 of the CGI tax code.
Two conditions must be met: “the amount of these expenses must be greater than 240,000 Dirhams (24,000 USDs) per year. In addition, the procedure for examining the taxpayer’s overall tax situation can only be initiated when the amount of expenditure referred to in Article 29 exceeds the amount of the declared income by more than a quarter. However, the taxpayer can justify, within the framework of the adversarial procedure, his resources by any means of proof”, underlines the tax specialist.
The tax adviser recalls, moreover, that when the tax authorities find that an offending taxpayer, concerned by the examination of the tax situation, has not filed the tax identity form provided for by Article 78 of the CGI, nor the declaration of existence (Article 148-I of the CGI), tax authorities may automatically assign a tax identifier to such an offending taxpayer. The next step will be to initiate the automatic taxation procedure provided for by Article 228 of the CGI.
Hassan El Arif
