Horizontal Monitoring Theo Poolen Deputy Director-General Dutch Tax and Customs Administration...
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Transcript of Horizontal Monitoring Theo Poolen Deputy Director-General Dutch Tax and Customs Administration...
Horizontal Monitoring
Theo PoolenDeputy Director-General
Dutch Tax and Customs Administration (DTCA)January 2009
Contents
• Developing the idea of horizontal monitoring
• Key elements of horizontal monitoring • Large businesses: compliance agreements and Tax Control Framework
• Small businesses: optimizing the tax value chain
Towards a new approach
• Changes in society and culture
• Input from business community- no trust business-tax administration- backlog
• International developments corporate governance
Horizontal monitoring key values
• mutual trust, understanding and transparency• ‘disclose’ current tax risks• providing certainty in advance• no surprises• less frequent and less detailed audits• a 'commercial' service level as to
– timeliness– single point of contact– understanding the business– quick response
Segments
1,500 LB
11,000 MSB’s
1,200,000 smallbusinesses
Compliance agreements
• Pilot 40 large businesses
• Commitment on the highest level (Board to Board)
• Agreement on manner and intensity of monitoring
• All taxes and tax collection
• Within boundaries law/policy/jurisprudence
• No additional rights / obligations
• Individual agreements; no blueprint
Core characteristics of a compliance agreement
• LB submits significant tax risks real time to the tax
administration
• LB submits facts and its view on tax consequences
• No obligation to submit internal/external tax advice
• Tax administration in return provides view on the tax
consequences expediently
• Tailormade approach
• Solution for pending tax issues in past years
Change in culture/behaviour
• Problem-solving attitude• Being able to build and maintain relations• Empathic and listening capacities• Decision making capacities• Knowledge on meta-communication• Mutual trust • Continuous dialogue, also on the process
and the behaviour of parties involved (including: agree to disagree)
Evaluation first part of pilot
Advantages (LB and TA):
- working on actual issues
- reduction of uncertainties
- expedient dealing with issues
Advantages TA:
- faster internal processes
- involvement of management
- improved communication with LB
Tax Control framework
• Importance of organizing trust - trustworthiness
• Letter of 9 June, 2006 State Secretary of Finance to the Dutch Parliament:
“I emphasize that compliance agreements will be concluded with companies that have an adequate tax control framework’’
Peeling the onion
Tax audit
Businessprocess
Internal control
Internal audit
External audit
Tax audit
SOX-audit
in control statement (SOX)
Audit annual accounts
SAS70 (TPM)
Other techniques
COSO
Tax Assurance
Our work changes
Business cycles Business cycles
transactions
BCF/TCF
Testing the TCF
Tax issues (‘risks’)
Tax returns
Discussion in advance
Audit tolerance
Work will primarily be aimed at the TCF
Horizontal monitoring small businesses
• Solving compliance issues in advance with trade and industry organizations
• Promoting the use of trusted administrative software
• Tax intermediaries
Horizontal monitoring tax intermediaries
• Building quality by aligning work processes
• Trusting the internal quality system
• Statement by individual clients
• Green lane for tax returns
• Monitoring on “meta” level
• Creating a learning circle
Optimizing the tax value chain
– Large Businesses: compliance agreements
– Small businesses: - trade and industry organizations- intermediairies
– Private Taxpayers: pre-filled tax return
– Customs: Authorised Economic Operator
Tax payer Tax intermediaries
Tax administration
horizontal monitoring
thank you for your attention