Notes on tax updates/uncertainties in dealing with bank transactions of individuals, the subject of the circular dated 1/31/1399 of the Tax Affairs Organization

Notes on tax updates/uncertainties in dealing with bank transactions of individuals, the subject of the circular dated 1/31/1399 of the Tax Affairs Organization

Among the cases that, during the tax investigation of taxpayers’ bank transactions, according to paragraph 18 of the Circular 31/1/99 of the Tax Affairs Organization, there were and still are ambiguities for the investigation officers and then the dispute resolution authorities. The terms are written statements of the mood and the nature of the transaction

Modi states in writing that this transaction does not have an income nature for me (same as paragraph 18 of the circular), but it is not accepted by the tax officer, and subsequently, the tax officer, without having any documentation in hand, considers that transaction as Modi’s income and compared to It will determine its tax.

In other words, considering that the tax officer himself does not have a document that shows that this deposit was income, he did not consider the taxpayer’s written statement that this transaction was not of an income nature acceptable to him and considered it as taxpayer’s income. and

In other words, the tax officer has only one deposit transaction and considers it as taxpayer’s income, and does not consider the taxpayer’s written statements sufficient and asks the taxpayer for the nature!!! Specify the transaction.

It seems that the nature of the transaction should be defined (standardized), what the circular means by this phrase, and also how much should be the limit of the written statements of Modi subject to paragraph 18 of the circular in order to be accepted, in this case, both during the initial investigation and At the stage of investigation in the implementation of Article 238 of the Civil Code or tax dispute resolution authorities, the case will be handled or closed more easily.

On the other hand, we can see that the decision dated 27/12/1399 of the Tax and Banking Expert Committee of the Administrative Court of Justice, Paragraph 18 of the Circular 31/1/1399 of the Tax Affairs Organization (Circular on how to claim tax due to bank transactions) is among the acceptable cases. It considered the legality of demanding taxes from bank transactions, while in general tax cases of this kind, which are reasons for demanding taxes with astronomical figures, they did not pay attention to paragraph 18 of this circular and did not accept the taxpayer’s written statements, and exactly The deposit transaction is considered as taxable income and leads to tax determination.

Among the other cases mentioned in the decision dated 17/12/99 by the tax expert board of the Administrative Court of Justice and certainly not unrelated to this paragraph 18 is that it is the tax administrations that must prove the income nature of the transactions, in other words, the claim The income of the transaction for the taxpayer must be proved by the tax affairs department and not by the taxpayer, which is not taken into account in paragraph 18 of the circular as mentioned above, and it will necessarily be a violation of the taxpayer’s rights. Moreover, in the judicial procedure governing the Administrative Court of Justice, the burden of proving and verifying the income from the place of Modi’s bank transactions is the responsibility of the tax administration and not the taxpayer, but the current and prevailing procedure in the tax administrations is exactly the opposite of this issue and every transaction It is of an income nature unless Modi can prove otherwise and with this situation, Modi’s written statements have no place in Arab tax proceedings.