DIRECTOR SUMMONED TO SRS TO PROVIDE AN EXPLANATION. WHAT TO DO?

Practice shows that in the status of a witness, during an audit or if a criminal case has been initiated, any person can be summoned to the Finance Police who, in the opinion of the inspectors, might be aware of questionable transactions—including your current or former employees—to provide testimony from memory regarding specific circumstances, partners, and the course of your company’s business transactions.

Naturally, the director and the chief accountant are the first to be invited. Witnesses are sent an invitation to appear or provide an explanation during the audit. All testimony is recorded in a protocol.

Here are some suggestions on what to do when you have received an invitation to appear at the SRS or the Finance Police…

#1 You should not ignore the invitation

Often, failure to appear is interpreted almost as proof of guilt. The SRS will begin to wonder if your company is even operating at all.

And yes… for failure to appear without a valid reason, you can also be held administratively liable.

#2 Prepare for questions

Most likely, the purpose of the conversation will be to collect evidence of violations with your help. For example, regarding VAT evasion or possible fictitious transactions. Therefore, questions like these are most frequently asked:

How and why did you meet your business partner?

Who signed the contracts and delivery notes?

How was the product delivered or the service provided?

Where was the product stored?

What are your duties in the company?

What are the sources of the funds?

#3 Maintain a relaxed demeanor

Inspectors or investigators tend to use various psychological tricks to achieve the desired answers. They may even intimidate you with massive fines, as they are not held accountable for such blackmail.

You must go to the interview with the firm conviction that all transactions have been handled in accordance with legislative requirements. No violations. No panic.

#4 Answer briefly and confidently

Of course, it is impossible to predict all questions in advance. Furthermore, investigators often ask the same question repeatedly, hoping that you will become contradictory in your fabrications. Therefore, first of all—do not rush your answers. Think carefully. Try not to say anything extra. Every unnecessary word can be interpreted by the inspectors to your disadvantage.

It is better to give an unspecific and general answer than to provide extensive and therefore contradictory testimony. After all, it is only human to not remember certain things… Phrases like these will be very useful here:

As far as I remember, …

It is possible that …

Most likely, …

If I remember correctly, then …

If I am not mistaken, then …

Remember that you have the right to consult with your lawyer before each answer, as well as to request a rewrite of the protocol. Your authorized lawyer is allowed to participate in any such conversation. If you realize that the matter might be serious, definitely arrive for the conversation together with an attorney.

#5 Check the protocol

Carefully reread the protocol so that SRS employees do not have the opportunity later to interpret what the inspector wrote at their own discretion. Cross out phrases that are easily misunderstood.

If possible, before signing, give the protocol to the lawyer you brought along to read through. They will not be as nervous as you are.

We recommend discussing the desired answers to the interrogators’ questions with employees or suppliers before going to the SRS, as well as discussing potential risk topics with your accounting department and lawyer.

P.S. Next time, we will talk about the most dangerous tax reduction schemes that should be avoided, as there are also perfectly legal methods!