Co-operative Compliance Responsible corporate behaviour in tax matters: What are the potential benefits for developing countries?

Transcription

1 Co-operative Compliance Responsible corporate behaviour in tax matters: What are the potential benefits for developing countries? Pay your taxes where you add the value Ministry of Foreign Affairs 2 July 2015

2 Setting the scene Global compliance trends Increased public scrutiny Transparency initiatives Multilateralism Cooperative compliance Aggressive tax authorities Interest in fairness and efficiency of tax systems Scrutiny to explain tax affairs Automatic information exchange Regulated selfassessment & external tax assurance Ambiguous behavior 2 July Pay 2015 your taxes where you add 2

3 What do these trends mean for tax authorities? Increased administrative burdens due to transparency initiatives Need to find right balance between raising revenue and reducing economic distortions on businesses A workforce mind shift and change in audit approach Effective management of tax expenditures, tax-based stimulus packages Streamlining and simplifying tax systems Use of IT, tax software for electronic filing and payment Secure confidentiality / proper use of taxpayer information New effective ways to assure tax compliance Design of an internationally competitive and efficient tax system: the balance between raising revenue and attracting, retaining investment. Pay your taxes where you add the value 2 July

4 Co-operative compliance The fundaments of co-operative compliance are mutual transparency, justified trust and better understanding of the taxpayers business and risk profile. Taxpayer provides timely and proper information has functional Tax Control Framework; provides assurance on processes and data (externally and internally); can communicate about it. Tax administration provides advance certainty / predictability can rely on the information provided, has a cooperative compliance process in place enabling the validation whether the taxpayer s processes are solid & sustainable, can communicate about it Pay your taxes where you add the value 2 July

5 How to make co-operative compliance work? Mismanaged expectations Mistrust Increasing cost of compliance Taxpayer: Be transparent Put your money where your mouth is Manage expectations Tax Administration: Set clear, measurable objectives Enable / train employees Define the concept of trust / auditable Tax Control Framework Quid pro quo Delivering quality compliance: right amount of tax due on time in an effective and efficient manner Pay your taxes where you add the value 2 July

6 Where can/ does it go wrong? Taxpayer: not in control Mismanaged expectations Mistrust Tax Admin: Unpredictable behaviour Increasing cost of compliance Pay your taxes where you add the value 2 July

7 What is needed by the Tax Administration? The co-operative compliance audit approach of the Tax Administration should consist of: Clear objectives Business transformation plan Performance measurement process Enabling Technology Risk assessed approach Training & Workforce acceptance Does a co-operative compliance audit process fit within the current regulatory environment? If not: are we prepared to change the law? Pay your taxes where you add the value 2 July

8 Practical solutions; mirroring the building blocks The building blocks should be mirrored to the co-operative audit process of the external auditors and tax administrations. Tax Payer - (Tax) strategy - Business operations - Tax operations - Risk management & controls - Monitoring & testing - Assurance Pay your taxes where you add the value Tax Administration - Develop and train a co-operative compliance audit process; or - Regulated Self-Assessment; or - Outsourcing data auditing process; or - A Mix of the above 2 July

9 Statement 1 Too much time is spent on the legal side of tax. More resources should be allocated to building sustainable tax compliance infrastructures. Pay your taxes where you add the value 2 July

10 Prepare to vote This image cannot currently be display ed. 1 Text to This presentation has been loaded without the Sendsteps add-in. Want to download the add-in for free? Go to 2 Type minbuza531 <space> your choice (e.g. minbuza531 b) No additional charge per message International rates may apply Co-operative Compliance International rates may apply June This image cannot currently be display ed.

11 More resources should be allocated to building sustainable tax compliance infrastructures A. Agree B. Disagree The question will open when you start your session and slideshow. # votes: 24 TXT Closed Thistopresentation has minbuza531 been loaded<space> withoutyour the Sendsteps Send : choice (e.g.add-in. minbuza531 b) Want to download the add-in for free? Go to Co-operative Compliance June

12 More resources should be allocated to building sustainable tax compliance infrastructures A. Agree B. Disagree 21 3 Closed TXT Thistopresentation has minbuza531 been loaded<space> withoutyour the Sendsteps Send : choice (e.g.add-in. minbuza531 b) Want to download the add-in for free? Go to Co-operative Compliance June

13 Statement 2 The introduction of regulated self assessment in (local) law to ensure both cooperation of business and protection against unfairness, is the cheapest driver towards an effective and efficient tax compliance infrastructure. Pay your taxes where you add the value 2 July

14 The introduction of regulated self assessment in (local) law is the cheapest driver towards an effective and efficient tax compliance infrastructure A. Agree B. Disagree The question will open when you start your session and slideshow. # votes: 26 TXT Closed Thistopresentation has minbuza531 been loaded<space> withoutyour the Sendsteps Send : choice (e.g.add-in. minbuza531 b) Want to download the add-in for free? Go to Co-operative Compliance June

15 The introduction of regulated self assessment in (local) law is the cheapest driver towards an effective and efficient tax compliance infrastructure A. Agree B. Disagree 17 9 Closed TXT Thistopresentation has minbuza531 been loaded<space> withoutyour the Sendsteps Send : choice (e.g.add-in. minbuza531 b) Want to download the add-in for free? Go to Co-operative Compliance June

16 Contact Thomas R. Malthusstraat 5 P.O. Box BJ Amsterdam The Netherlands T: +31 (0) M: +31 (0) [email protected] Eelco van der Enden Partner, Tax Reporting & Strategy All rights reserved. Not for further distribution without the permission of. "" refers to the network of member firms of PricewaterhouseCoopers International Limited (IL), or, as the context requires, individual member firms of the network. Please see for further details.