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Horizontal Monitoring Theo Poolen Deputy Director-General Dutch Tax and Customs Administration (DTCA) January 2009.

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Presentation on theme: "Horizontal Monitoring Theo Poolen Deputy Director-General Dutch Tax and Customs Administration (DTCA) January 2009."— Presentation transcript:

1 Horizontal Monitoring Theo Poolen Deputy Director-General Dutch Tax and Customs Administration (DTCA) January 2009

2 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

3 Towards a new approach Changes in society and culture Input from business community - no trust business-tax administration - backlog International developments corporate governance

4 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

5 Segments 1,500 LB 11,000 MSBs 1,200,000 small businesses

6 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

7 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

8 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)

9 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

10 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

11 Peeling the onion Tax audit Business process Internal control Internal audit External audit Tax audit SOX-audit in control statement (SOX) Audit annual accounts SAS70 (TPM) Other techniques COSO Tax Assurance

12 Our work changes 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

13 Horizontal monitoring small businesses Solving compliance issues in advance with trade and industry organizations Promoting the use of trusted administrative software Tax intermediaries

14 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

15 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

16 thank you for your attention


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