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How to Prepare for a Tax Audit – Step-by-Step Guide for Sole Proprietors and LLCs
Types of Tax Audits That the State Tax Service May Conduct
The Tax Code of Ukraine provides for three main types of audits – desk (cameral), documentary, and factual audits. Documentary audits can be either planned or unplanned, and either on-site or off-site.
It is crucial for businesses to immediately identify the type of audit, since this determines the grounds for conducting it, the timeline, notification procedure, and the list of documents required.
- Desk (cameral) audit is conducted by the tax authority based on reporting data and information from electronic systems;
- Documentary planned audit is conducted according to an approved schedule plan;
- Documentary unplanned audit is possible only on grounds stipulated by the Tax Code;
- Factual audit is conducted at the actual place of business activity, location of the economic entity, or where cash operations are performed;
Therefore, the question “how do tax audits proceed” has no single answer. For example, taxpayers must be notified in advance about a planned documentary audit, but a factual audit may begin without prior notice if there are legal grounds.
Scheduled State Tax Service Audits in 2026
The schedule plan of documentary planned audits for 2026 was published by the State Tax Service on December 24, 2025. As of September 2026, a version updated on June 26, 2026, is available on the official website. It covers legal entities, financial institutions, individuals, and audits concerning the correctness of personal income tax, military tax, and unified social contributions.
The mere absence of an enterprise or sole proprietor in the initial plan does not guarantee that a tax audit will not occur. The State Tax Service states that the schedule plan is updated twice a year considering current activity data and tax risks.
Is There a Moratorium on Audits?
In 2026, it is inaccurate to speak of a complete moratorium on State Tax Service audits.
By Presidential Decree No. 538/2025 dated July 21, 2025, the National Security and Defense Council’s decision was enacted regarding a separate moratorium on unjustified audits and interference of state bodies in business activities. Tax control, however, was not stopped. The State Tax Service applies a risk-oriented model and focuses primarily on taxpayers with high risks.
What the Tax Authority May Audit
The scope of documentary audit is much broader than just the correctness of tax return filling. The State Tax Service may analyze timeliness and completeness of tax payments, accounting and tax records, labor relations, currency operations, and compliance with other legislation overseen by tax authorities.
Before the audit, it is advisable to prepare a separate electronic or paper archive.
- tax returns and amended calculations;
- primary documents – acts, consignment notes, invoices, contracts;
- bank statements and payment documents;
- accounting and tax registers;
- documents related to payroll, personal income tax, military tax and unified social contributions;
- labor contracts, orders on hiring employees and personnel documents;
- documents regarding cash register equipment or software, cash operations and fiscal receipts;
- licenses and permits if the activity requires them;
- documents relating to transactions with counterparties that may affect tax liabilities;
The list should be adjusted according to the subject of the specific audit. Do not submit documents randomly or without understanding which audit question they pertain to.
For companies needing professional accounting audits, accounting services for sole proprietors and LLCs at Poshuk.info and auditing services may be appropriate. The accounting services page specifically includes audit preparation, support during tax audits, and document restoration.
How to Prepare for a Tax Audit – Step-by-Step Instructions
Preparation for a State Tax Service audit should not start by simply assembling folders for the inspector but with an internal review of the business itself. The most critical errors often arise from discrepancies between tax returns, bank transactions, primary documents, and actual operations.
- Check your enterprise or sole proprietor in the current schedule plan of the State Tax Service.
- Determine the type of audit, its grounds, period, and list of issues noted in the order.
- Reconcile tax reporting with accounting registers, bank data, primary documents, and cash register data or software.
- Check contracts, acts, consignment notes, and other documents for significant transactions.
- Analyze transactions with counterparties and confirm the real economic purpose of deliveries, works, and services.
- Eliminate technical errors legally correctable and prepare explanations for contentious transactions.
- Assign an employee, accountant, or lawyer to communicate with tax service representatives.
This preparation is especially important for VAT-registered LLCs with many counterparties, employed staff, or licensed activities. For sole proprietors, key areas often include income, bank receipts, primary documents, cash registers or software, employees, and compliance with the chosen taxation system.
You can also review a Poshuk.info resource “Tips and Resources for Sole Proprietors – Managing Accounting Independently or Outsourcing”.
What Risks Attract the State Tax Service’s Attention
In 2026, taxpayer audits increasingly depend on digital analytics and risk indicators. The State Tax Service specifically cites indicators such as mismatch between the number of cash register equipment or software and number of employees, zero revenues despite licenses, irregular fiscalization, and income that does not correspond to obvious business expenses.
Another indicator is too low a share of cash payments. In the State Tax Service explanation dated July 28, 2026, a share below 5 percent is mentioned as a possible sign of failure to perform some operations using cash register equipment or software. The tax authority also considers citizen complaints.
Auditing counterparties should also be part of internal control. Having a contract and consignment note does not eliminate risks if the actual circumstances contradict the documents or data already held by the State Tax Service.
How Long a Tax Audit Can Last
The duration depends on the type of audit and taxpayer category.
For planned documentary audits, the Tax Code sets a maximum of 30 working days for large taxpayers, 10 working days for small businesses, and 20 working days for other taxpayers. The law allows extensions within certain limits.
Unplanned documentary audits generally may last up to 15 working days for large taxpayers, up to 5 for small businesses, and up to 10 for others. Factual audits should not exceed 10 days, with the possibility of extensions by up to 5 days given statutory grounds.
What to Check Before Admitting Tax Inspectors
During on-site or factual audits, the taxpayer has the right to inspect the documents of State Tax Service officials. Article 81 of the Tax Code requires issuance of the audit assignment, a copy of the order, and official IDs of the persons named in the assignment.
The assignment and order should be checked for:
- the name and details of the taxpayer;
- type and purpose of the audit;
- legal grounds for conducting it;
- start date and duration;
- period of activity covered by the audit;
- full names of the State Tax Service officials;
Failure to provide documents required by Article 81 or their improper issuance may be reason to deny access to a documentary, on-site or factual audit. However, refusal to admit for other reasons is not allowed, so such decisions should be made only after legal analysis of documents.
In complex situations, you can engage a financial law attorney through Poshuk.info or use the category of consultations with attorneys and lawyers.
How Long You Need to Keep Documents
The question “what to prepare for an audit” is directly related to the document retention periods.
As of 2026, clause 44.3 of the Tax Code provides, among other things, 1825 days for main primary documents, accounting registers, and financial reports of certain categories of taxpayers. For documents and information related to transfer pricing, controlled foreign companies, and certain transactions with non-residents, the minimum period is 2555 days. For other specified documents, the period is 1095 days.
Documents related to an audit or subsequent appeal must be kept until the relevant procedure is completed, even if the usual minimum retention period has expired.
For owners of foreign structures, the material “Report on Controlled Foreign Companies in 2026 – Main Traps and How to Avoid Tax Service Fines” may also be useful.
What a Tax Audit Act Is and How to Appeal It
A tax audit act records the facts and conclusions established by the controlling authority. It is important to distinguish the act from the tax notification-decision.
If the taxpayer disagrees with the act, they may submit objections, additional documents, and explanations within 10 working days from the day after receiving the act or certificate. The controlling authority’s commission reviews the materials within the next 10 working days.
This is why the common query “appealing a tax audit act” is more accurately understood legally as submitting objections to the act. If, based on the audit, the State Tax Service issues a tax notification-decision or other ruling, it can then be subject to administrative or judicial appeal.
The Tax Code sets a 10 working day deadline for administrative appeal of the tax notification-decision, starting from the day after receiving the decision.