Tax control framework

Companies face an increasingly complex tax and legal environment, at both the national and international level. Transparency and documentation obligations are continually evolving and there are ongoing challenges around digitalisation to deal with.

At the same time, the risks of getting things wrong – and the penalties for doing so – are becoming greater. Not only for the company, but also for senior management personally. Tax authorities are taking a more aggressive approach to enforcement, with rapid initiation of criminal tax proceedings, fines, and an increase in special audits.

Some companies and their Board members do not realise the extent to which they are personally liable and can be prosecuted under criminal tax law - even without intent.

So how can businesses mitigate these risks and ensure tax compliance is as accurate, straightforward and transparent as possible? For a growing number of companies, the answer is a tax control framework (TCF). Our TCF approach can support your business to grow internationally, mitigate risk, and seize new opportunities.

What is a tax control framework?

A tax control framework (TCF) is a set of processes and internal control procedures that ensure a company’s tax risks are known and controlled.

It is a step-by-step roadmap for managing tax matters efficiently and transparently, making sure the company complies with its reporting and compliance obligations at both the national and international level, and everyone in the business – not only the finance or tax team - understands the steps they should take and the processes they need to follow in relation to tax matters.

How does it work?

A tax control framework is fully customisable and scalable to the needs of every business.

It focuses on seven key areas:

Culture
Objectives
Organisation
Risk
Programme
Communication
Monitoring and improvement

By reviewing, analysing and diagnosing the business’s performance across these seven vital areas, it is possible to develop a consistent, structured framework for managing all tax matters.

What are the advantages of a tax control framework?

A tailored, robust TCF:

protects the company from tax risks, unexpected additional taxes, fines, penalties and loss of reputation
helps to defend the company and its senior management against accusations of tax irregularities
creates trust in the finance function and increases the quality of tax-relevant data
improves transparency and efficiency of tax processes
strengthens cooperation and trust with tax authorities
forms the basis for automation and digitalisation of processes
provides a strong foundation for sustainability reporting

How can Forvis Mazars support you in developing a tax control framework for your business?

Our experienced team works with a wide range of companies to develop and implement tax control frameworks tailored to their needs.

First, we work with you to look at the compliance culture in your business, your compliance goals and how compliance is managed.

Next, we review the tax risks, in the context of domestic taxation frameworks, applicable international standards, and the tax regimes of any overseas markets you operate in.

Then we develop and document a program of mitigation measures to safeguard against the identified risks, including guidelines, processes and staff training.

We help you communicate the compliance program throughout the business, and we work with you to implement a monitoring and improvement program, to ensure your tax control framework always remains up to date and effective.

Throughout this process, we focus on achieving the smoothest and fastest implementation possible, based on pragmatic and goal-driven solutions.

Tax control framework in practice

The project approach we have developed for the implementation of a Tax control framework involves three project phases: preparation phase, analysis phase and implementation phase.

Tax control framework: Quick-Check

Are ever-increasing compliance requirements putting pressure on your tax department? Nevertheless, it's crucial for businesses to have a clear understanding of the specific procedural tax obligations that will be imposed on your company in the near future, and for related reporting lines and processes to be clearly defined and documented.

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