Assume as a starting point that there is a tax control at a business partner. The foreign authority questions an invoice or there is a request by third countries for cooperation; they send a standardized first questionnaire which may contain even trick questions that cannot be answered properly (e.g. „what was the purchase price of your supplier? “).
- Go through the questions in the following checklist: make sure there are proper answers and that documentation is always up to date, then there will rarely be big surprises
1. General Information
- Extent of economic activity during the relevant period
- Ultimate beneficial ownership (include chart)
- Place of effective Management (board meetings, files)
- What was the relationship to company CCC?
2. Contracts / Services
- Was Mr. UBO employed in the company in the period
- If yes,
- in which location the employment was undertaken
- provide breakdown of the employment income
- Submit a copy of the social security and tax declaration
- Explain if there were any fringe benefits or allowances
- Has there been any agreement for services by Mr. UBO to the company; were provisions paid to him or related parties?
- Please provide supporting documentation
3. Business Transactions
- Have there been any business transactions with CCC?
- If yes, kindly
- provide a breakdown of all business transactions
- provide matching invoices
- Indicate in which accounts these transactions are reflected in the bookkeeping
- Inform about other transactions the company may have undertaken involving Mr. UBO either directly or indirectly
- If applicable, inform who signed the agreements
- Inform if accounting is done in house or outsourced
- Information on the formalities used to conclude transactions between the company and Mr. UBO or CCC
- Breakdown of any debts outstanding to and from the above-mentioned parties during the relevant period
- Information how each of the payments were made (bank, cash, credit card etc.)
- Information who made and authorized the payments
- contract details (purpose, lender, period, amount, interest)
- Are borrower and lender associated parties?
- How was the loan made / paid (bank, cash, asset transfer)?
- from which account it was paid by the lender (IBAN)?
- on which account it was received by the borrower (IBAN)?
- Guarantee and the terms of guarantee
- Interest payments: amounts and dates
- Repayment: Amounts and dates of full or partially repayment
- Information how the loan was financed
6. Business Relation
- On what occasion happened the contact to the company CCC?
- Which other companies did the company ask for competitive offers for the planned services? Why was this supplier selected? Was this documented?
- What kind of economic benefit resulted in the relationship to this company?
- Who were suppliers before this selection? What was the reason to change?
- Did the company ask for information about the reliability of the foreign company? Since when is this company registered as VAT payer? Who was approached, which information was received?
- Provide extract of the commercial register and address of the shareholders
- What is the profession and the industry- specific education of the management?
- How is the foreign business organized?
- Which website has the company?
- In which industry registers can the company be found?
7. Proof of Services
- How was the agreement with the supplier concluded?
- How did the supplier prove that the services have really been performed?
- How did the services create a value for the company?
- How were the services documented (time sheets, protocol of meeting, reports etc)?
- Which physical persons were providing the services, – please provide names, addresses and qualification?
- How and when were the services paid
- Who is the final beneficiary of these payments?