What you’ll learn in this article

• The difference between a local inquiry and a formal tax inspection

• What powers the tax authorities actually have – and where their limits are

• When you’re required to cooperate – and when silence is safer

• How even an “informal” visit can turn into a serious problem

• What to do if you’re unsure about your rights

Local Inquiry vs. Tax Inspection – What’s the Legal Difference?

A local inquiry is a fact-finding procedure under Section 80 of the Czech Tax Code. The tax authority aims to “verify facts relevant to tax administration” – such as the company’s actual address, availability of documents, or the nature of business operations.

Unlike a tax inspection, the local inquiry does not review your filed tax returns or attempt to uncover inconsistencies. The officer should not interrogate you or inspect your entire documentation at will. Their purpose is to gather information, not judge or accuse.

For example, they might visit your premises to verify whether invoices match actual stock or services. If inconsistencies are found, a formal tax inspection may follow.

A tax inspection is a structured legal process designed to assess whether you fulfilled your tax obligations correctly. It officially starts with a written notice – and from that moment, strict deadlines and legal procedures apply.

Why It Matters So Much

Many taxpayers unknowingly harm their position during local inquiries. They might confirm an inaccurate statement, provide unnecessary documents, or allow access beyond what is required.

A common mistake? Believing the visit is “just a check,” when in fact it’s the prelude to a full audit.

Lawyer’s Recommendation

From my experience: underestimated local inquiries often lead to serious trouble. Clients usually contact me only after the inspection has begun – and by then, it’s often too late to undo mistakes.

My advice? Involve a lawyer from the very first communication with the tax authority. Not because you’re hiding something – but because even small missteps can escalate quickly.