Tax Compliance Management System Bedeutung

In recent years, VAT has proven to be the biggest area of tax risk for many companies in Germany for the following reasons, among others. It is susceptible to fraud due to existing system issues. Although they are of considerable importance as tax revenues, they are often subject to control by the tax administration. An effective tax compliance management system also includes compliance with tax accounting and registration obligations in accordance with §§ 140 et seq. of the German Tax Code (AO). This area of activity should not be underestimated. Some taxpayers are required to keep books and records. In this context, the principle of complete, correct, timely and orderly accounting applies (§ 146 AO). In a letter dated 14.11.2014, the Federal Ministry of Finance published complete changes to the definition of “correct accounting” with effect from 01.01.2015. These are mainly companies that fulfil their accounting, recording and archiving obligations in electronic form using computer systems. If the completeness and verifiability of compliance with the procedural provisions of Art.

146 AO cannot be satisfactorily proved by procedural documents, the tax authorities may consider this to be a factual defect. This could, for example, give rise to the risks of an arbitrary assessment of the tax bases by HYPERLINK `www.lhp-rechtsanwaelte.de/tax-law/field-audit/arbitrary-assessment-in-company-tax%20audit/` in accordance with Article 162(2)(2) AO. In Germany, tax resistance must be reduced in a targeted and sustainable manner by increasing the customer-oriented orientation of the tax authorities. Through service management and risk management, the service situation in tax offices should be optimised and expanded and thus acted in accordance with the taxpayer`s law. Through risk-based resource management, the aim is to facilitate the identification of tax evaders in the processing of cases in tax offices and to persuade them to change their behaviour in the long term through sanctions. Due to the possibilities of electronic tax audits in companies by GDPdU and today by GoBD, a program-supported global audit of all relevant tax data instead of random checks has become possible. Alessa is able to merge data between different source systems in controls. This is especially important for companies with multiple pre- and ancillary systems, branches or subsidiaries, and foreign companies. At present, the tax discussion in Germany – and not only in the specialist literature – focuses on the topic of “tax compliance”. This is due, in particular, to the letter of the Federal Ministry of Finance of 23/05/2016 amending the degree of application of the Tax Code with regard to Art. 153 AO and in which the federal Department of Finance describes the indicative effect of a functioning tax compliance management system. Of course, all clients want to ensure their economic success also with regard to tax legislation and therefore the implementation of a tax compliance management system is advised.

We offer you individual and competent advice from our tax advisors or tax law experts on the topic of “tax compliance”. We create checklists for you and give you instructions and help for daily use. Our law firm has extensive expertise and practical experience as tax lawyers and tax advisors in order to provide the best possible support in individual cases. This in-depth knowledge is continually expanded in our law firm through the ongoing training of our partners and employees. A tax CMS offers advantages in many ways: it secures an organization so you can be sure that the structures and processes created adequately address tax issues. This gives you peace of mind. In addition, a tax CMS offers protection against charges of corporate disruption (Administrative Offences Act) or even accusations of intentional tax evasion (HYPERLINK “www.lhp-rechtsanwaelte.de/steuerstrafrecht/ Criminal Tax Law”). Even if an existing tax CMS under German law can only be considered as an indication of the absence of intent or recklessness (cf. § 153 AO), it is in particular tax-honest companies that have an intrinsic interest in a tax CMS, as this can help them document their tax awareness. Therefore, the topic of “tax compliance” is fundamentally relevant to everyone.

A documented tax audit system not only reduces the risk of tax regulatory violations, but also protects the company from damage to its image and legal representatives from personal liability. This also translates into opportunities and synergies for the company that can be exploited. If it is subsequently discovered that an incorrect or incomplete tax return has been submitted, the management of the company has the obligation to inform the tax office and correct the tax return immediately. [6] However, if such an error fulfils the offence of tax evasion under Article 370 AO or frivolous tax evasion according to Article 378 AO, it may also entail criminal consequences for the company and its management. [7] The distinction between simple correction and voluntary self-disclosure[8] is decisive and therefore often controversial in this context, since an appropriate correction would only result in an additional tax payment (without avoidance interest), while tax evasion would result in additional interest payments and a voluntary disclosure surcharge. [9] The Federal Ministry of Finance commented in the implementing decree (OAS) on § 153 AO by letter of 23.5.2016 on the distinction between correction and voluntary disclosure[10]: “If the taxpayer has put in place an internal control system that serves to fulfil tax obligations, this can be done if necessary. constitute evidence of intent or recklessness, but this does not exempt the individual case from being examined. Especially for the needs of SMEs, PKF has developed an approach in which tax risks are systematically identified and assessed based on an analysis of the state of tax compliance. Subsequently, standard or special modules can be ordered individually. The PKF Tax CMS Tool, which is Excel-based and can be used outside of ERP, is used to support this. The PKF Tax CMS Tool monitors and documents the four phases of the process described below in an overview. SDI understands the term “internal control system” as part of a compliance management system (CMS), which aims to comply with tax regulations, taking into account legal and business principles.

[11] By implementing a tax compliance management system, the business can demonstrate that everything necessary has been done to prevent errors. There is therefore no organizational fault. [12] Overall, this would again mean that the correction should be considered a mere correction and not a voluntary disclosure. However, even in the case of an existing tax compliance management system, the tax administration reserves the right to review the individual case, as intentional acts generally cannot be excluded by such a system. [13] Every taxable person is required to file an income tax return. This also includes sales tax and payroll tax returns. German tax law governs the question of who must submit which returns. In addition, such declarations must be subject to certain reporting obligations.

For example, the compliance system should clarify and ensure internal responsibilities for preparing and filing tax returns, usually to avoid non-filing or late filing. Of course, the specific deadlines for the latter must be clear. In addition, a tax compliance management system can also help prevent the submission of significantly incorrect tax returns (four-eyes principle). LeitnerLeitner`s experts will be happy to assist you in the development, implementation and evaluation of such a system tailored to your needs. An established and well-documented tax CMS is considered positive by the tax administration, especially in the case of tax return corrections. After all, anyone who can develop a holistic tax CMS builds trust not only internally, but also with the responsible tax office. If an error occurs in tax returns, a tax CMS can ensure that intent or recklessness can be defended when preparing an incorrect German tax return, and it can also help ensure that a correction to the tax return can be made as a review and not as a self-disclosure “www.lhp-rechtsanwaelte.de/steuerstrafrecht/selbstanzeige/” HYPERLINK.