How to Object to a Finalized Tax Assessment Notice

How to Object to a Finalized Tax Assessment Notice

Today, taxation constitutes one of the primary sources of government revenue. Taxes may be imposed in either a direct or an indirect form. Accordingly, taxes are generally classified into two categories: direct and indirect taxes. Because the right to object primarily applies to matters concerning direct taxes, this article focuses on the rules governing direct taxation.

One of the most common tax disputes involves taxpayers’ objections to a tax assessment notice.

Pursuant to Article 110 of the Direct Taxation Act, taxpayers subject to direct taxes are required to prepare and submit their tax return to the relevant Tax Affairs Office within four months following the end of the fiscal year.

The Tax Affairs Office is obliged to review the tax return within one year from the expiry of the filing deadline. In addition, the office must issue and notify the taxpayer of the tax assessment notice within one year after the end of the tax return submission period.

A key issue in tax disputes is familiarity with the correct procedure for objecting to a tax assessment notice. Failure to submit an objection in a proper and timely manner may result in the objection being deemed ineffective or inadmissible.

Review of Objections by Tax Dispute Resolution Boards

Tax Assessment Notice

The Tax Affairs Office communicates the result of its tax calculations to the taxpayer through a document known as the tax assessment notice.

Under the law, taxpayers must file their tax returns within 4 months of the end of the fiscal year. The Tax Affairs Office is then required to examine the return within one year from its submission and issue the tax assessment notice within three months after the expiration of that period.

Types of Tax Assessment Notices

• Payroll Tax Assessment: Payroll tax is one category of tax assessment notices. Where payroll tax is not paid on time or is paid in an amount less than the prescribed tax, the Tax Affairs Office is required to issue a payroll tax assessment notice in order to collect the outstanding tax and applicable penalties from the payer.
• Withholding Tax Assessment: A withholding tax assessment notice is issued when no objection is raised. If the payer objects to the assessed amount, the objection must be submitted in writing to the relevant Tax Affairs Office within thirty days. If no objection is filed within this period, the assessment notice becomes final.
• Income or Performance Tax Assessment: This type of assessment reviews the taxpayer’s income and transaction records and is issued where discrepancies are identified. If the tax is paid within the specified deadline, the taxpayer may benefit from a forty percent reduction in tax penalties. However, if payment is not made on time, the tax enforcement unit will proceed with collection through legally prescribed methods.

Key Characteristics of an Objection Letter

• Avoid unnecessary explanations and present the objection concisely.
• Use formal and respectful language.
• Seek assistance from experienced tax consultants or legal counsel.

Legal Requirements for Objecting to a Tax Assessment Notice

Objections to a tax assessment notice must comply with the conditions set forth in Article 238 of the Direct Taxation Act. According to this provision, if a taxpayer objects to the assessed tax amount, the objection must be submitted in writing to the relevant Tax Affairs Office within thirty days from the date of notification.

Accordingly, the requirements for a valid objection are as follows:

• Submission of the objection within the statutory thirty-day period from the date of notification
• Submission of the objection in written form to the relevant Tax Affairs Office

If no objection is submitted within the thirty-day period, the following situations may arise:

• If the assessment notice was actually served on the taxpayer, it becomes final under Article 239 of the Direct Taxation Act, and no further objection will be permitted.
• If the notice was served legally but not actually received, the taxpayer is deemed to have objected by default, and the tax file is directly referred to the Primary Tax Dispute Resolution Board in accordance with the note to Article 239 of the Direct Taxation Act.

Methods of Serving Tax Documents

• Service by an official process server.
• Service by postal mail.
• Publication in a widely circulated newspaper.

Manner of Serving a Tax Assessment Notice

The tax assessment notice must be served at the taxpayer’s correct address. Where legal service is effected without actual service, the case file is referred to the Tax Dispute Resolution Board.

This situation arises where the notice is legally served, but the taxpayer is not present at the registered address or refuses to accept service.

Frequently Asked Questions About Objecting to a Finalized Tax Assessment Notice