Joint Audit 2019: Enhancing Tax Co-Operation and Improving Tax Certainty, Forum on Tax Administration

Description

Improved dispute prevention and dispute resolution are key concerns for both business and tax administrations by creating incentives for low-risk behaviour among taxpayers and helping tax administrations to better match resources to tax risks. Joint Audits are an essential element in the Tax Certainty Agenda and allow tax administrations to operate efficiently and effectively in an increasingly global environment, co-operating ever more closely and frequently with each other to ensure compliance, tackle base erosion and profit shifting, and minimise the probability of costly and time-consuming disputes. The report sets out the most advanced form of audit-related tax co-operation, provides best practices and identifies possible areas of improvement and future work, not limited to the OECD Forum on Tax Administration. Table of contents Preface Foreword Abbreviations and acronyms Executive summary Notes Reference Key recommendations Introduction The Project Background and context A brief history of international tax co-operation Looking into the future Notes References Chapter 1. Joint Audits within international tax co-operation 1.1. Exchange of information 1.2. Presence of tax officials abroad 1.3. Simultaneous tax examinations 1.4. Joint Audits Notes References Chapter 2. Joint Audits and the tax certainty agenda 2.1. Introduction 2.2. Managing Joint Audits effectively within the wider tax certainty context 2.2.1. Joint or co-ordinated international tax risk assessment 2.2.2. Joint Audits and MAP 2.2.3. Joint Audits and APAs 2.2.4. Conclusion 2.3. Recommendations Notes References Chapter 3. Costs and benefits 3.1. Key benefits 3.2. Costs 3.3. Optimising the cost-benefit-ratio 3.4. Measuring benefits 3.5. Recommendations Notes Chapter 4. The legal framework for Joint Audits 4.1. The current international landscape 4.1.1. Overview of the key instruments 4.1.2. Assessment of the current legal landscape 4.2. Potential areas of future work 4.3. Recommendations Notes References Chapter 5. The role of the taxpayer 5.1. Introduction 5.2. Case selection phase 5.2.1. Co-operative and non-co-operative taxpayers 5.2.2. Request of the taxpayer 5.3. Operational phase – preparation, conduct and completion 5.4. Recommendations Notes Chapter 6. Building capacity, relationships and trust 6.1. Capacity building 6.2. Relationships and trust 6.3. Learning by doing 6.4. Recommendations Reference Chapter 7. Joint Audit guidance 7.1. Strategic approach to Joint Audits 7.2. Case selection 7.2.1. Selection process 7.2.2. Case selection criteria 7.2.3. Case preparation and initiation 7.2.4. Reaction to a Joint Audit proposal and decision 7.2.5. Involvement of taxpayer in selection process 7.3. Preparation of the audit process 7.3.1. Conclusion of a MoU or an ad hoc agreement 7.3.2. Selection of the Audit team 7.3.3. Preparation of the initial meeting 7.3.4. Agreement on communication channels 7.3.5. Involvement of taxpayer 7.4. Conducting the audit 7.4.1. Collective information requests 7.4.2. Operational phase 7.4.3. Update on audit progress 7.4.4. Involvement of taxpayer 7.5. Audit completion 7.5.1. Final audit phase 7.5.2. Domestic audit outcomes 7.6. Evaluation 7.7. Recommendations Notes Annex A. Summary of recommendations 1. Joint Audits and the Tax Certainty Agenda (Chapter 2) 2. Costs and benefits (Chapter 3) 3. The legal framework for Joint Audits (Chapter 4) 4. Role of the taxpayer (Chapter 5) 5. Building capacity, relationships and trust (Chapter 6) 6. Joint Audit guidance (Chapter 7) 6.1. Strategic approach 6.2. Case selection 6.3. Preparation of the audit process 6.4. Conducting the audit 6.5. Audit completion 6.6. Evaluation Note