When to Dispute a Tax Assessment
Additional tax assessments do not necessarily mean that the tax authority's claims are fully justified. Tax departments often rely on formal "shell/technical" characteristics or fail to fully consider the economic reality of actual commercial transactions. If a company operates in good faith, retains original accounting documents, and can prove the true economic substance of the transactions, it has a strong chance of revoking the tax assessment notice before entering formal litigation.
Pre-Trial Appeal Stage
The first step is to submit an administrative appeal to the competent authority. Avoid using generalized arguments: you must address each disputed item in the audit report by attaching specific supporting documents, expert opinions, detailed accounting ledgers, and a clear legal position. Time limits at this stage are extremely strict, so it is recommended to formulate a litigation/appeal strategy and prepare the chain of evidence immediately upon receiving the tax audit report.
Court Litigation and Defense
If the pre-trial appeal stage fails to resolve the issue, a lawsuit must be filed with the specialized inter-district administrative court. The court reviews not only the formal compliance of documents but also conducts a substantive review of the actual reasonableness of the back taxes. In practice, as long as the authenticity of transactions and the errors in the tax audit conclusions can be proven, Golden Lex has repeatedly assisted clients in successfully achieving the complete cancellation of tax assessment claims.