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Large Taxpayer Units 12. Responsibilities, mission and vision statement of Large Business Units

Large Taxpayer Units 12. Responsibilities, mission and vision statement of Large Business Units. Nairobi, 14 – 18 February 2011. Common principles and themes in mission statements (to contribute to and to improve voluntary compliance).

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Large Taxpayer Units 12. Responsibilities, mission and vision statement of Large Business Units

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  1. Large Taxpayer Units12. Responsibilities, mission and vision statement of Large Business Units Nairobi, 14 – 18 February 2011

  2. Common principles and themes in mission statements (to contribute to and to improve voluntary compliance) • improve customer service by providing high quality service to each taxpayer in every interaction; • use of innovative methods to enhance customer service; • help taxpayers understand and meet their tax obligations; • enforcement of the tax law through fair and uniform application of the law; • use of risk-based approaches to manage compliance; • strengthen enforcement through compliance initiatives and innovative approaches; • strengthen relationships and cooperation; • balance service and enforcement; • be responsive to the needs of large taxpayers in a global environment; • improve internal capabilities, process and technology; and • improve the skills and productivity of the workforce through a quality work environment.

  3. Different approaches • All “statements” are intended to articulate the goals of the organization and the measures to achieve them. • Some countries have a “mission” or “vision” statement specifically designed for their large business unit and these specific “statements” are linked to the overall objective or mission of the whole tax administration. • Other countries do not have a “mission” or “vision” statement specifically tailored for the large business unit, but do have statements of objectives which are consistent with the overall mission statement of the tax administration.

  4. Mission statement ATO The ATO’s mission and the operating model of the Large Business and International (LB&I) are for the Income Tax section of the large market – however, similar objectives exist for the goods & services tax , excise and fringe benefits tax areas. Our Intent - Our business intent is to encourage voluntary compliance among large business taxpayers by assisting them to meet their income tax, capital gains tax and petroleum resource rent tax obligations, so that the community can be assured of regular and appropriate revenue flows and have confidence that the system is working properly. Our Model - The ATO’s compliance areas use the Compliance model and taxpayer charter as business models of our approach. The compliance model applies compliance products to the taxpayer depending on their behaviours and risks e.g. self regulating taxpayers are given a service based approach whilst higher risk groups tend to be audited. The taxpayer charter outlines the rights and expectations of taxpayers from the ATO. Our Aspiration - To work closely with large business taxpayers, their advisers and representative bodies in the fair administration of the income tax system, so that: • they can be certain as to their obligations under the tax laws • the systems we have in place make it as easy as possible to comply • costs of compliance are kept as low as possible • instances of non-compliance are dealt with speedily and firmly. Our Role - LB&I’s primary role is to maintain the integrity and efficacy of the income tax system in relation to large business taxpayers. We do this by promoting voluntary compliance through the provision of advice and assistance as well as by undertaking active compliance activities.

  5. Vision statement of Large and Midsize Business Division (LMSB) of the IRS US The vision statement of the LMSB operating division of the Internal Revenue Service is: • “We are a world-class organization, responsive to the needs of our taxpayers in a global environment, while applying innovative approaches to customer service and compliance. We apply the tax laws with integrity and fairness through a highly skilled and satisfied workforce, in an environment of inclusion where each employee can make a contribution to the mission of the team.” The Vision statement signifies how LMSB will drive toward achievement of agency mission and goals. This vision statement describes our role and the public’s expectation about how we should perform that role. It is derived from the overall Mission and goals of the Internal Revenue Service, which is: • “Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.” • It is important to continuously strive to be “best in class” in ways that are important to us as a tax administrator. It not only speaks to being efficient and effective, but doing our jobs with fairness and integrity. The ways in which we identify and deal with compliance risk, the professional treatment of our taxpayers, and the quality of work life for our employees are all factors that are considered in the health of an organization, and in being “world class”. • It also requires a culture in LMSB that supports being a “world-class organization”. This involves continuous employee engagement and open communications at all levels of the organization. It also involves a culture of accountability and innovation, as well as, a strong sense of pride and responsibility in what we are charged to do, administer the tax laws of the United States.

  6. 11. Responsibilities, mission and vision statement of Large Business UnitsThe Netherlands Nairobi, 14 – 18 February 2011

  7. Mission statement DTCA regarding Very Large BusinessThe Netherlands • The overall objective of the DTCA is to efficiently and effectively collect the amount of tax due by maintaining and improving voluntary compliance of taxpayers and by acting repressively to those who are not complying voluntarily. • We trust our taxpayer unless we have information they cannot be trusted. Our intelligence function becomes increasingly important.

  8. Mission LBU The Netherlands(2) • The quality of the tax control framework, the level of transparency and the level of compliance determine the level of (additional) supervision by the tax administration. If we agree with the taxpayer on the level of quality of the tax control framework and the taxpayer is fully and actively transparent about the tax-risks emerging from this framework the efforts of the DTCA can be limited to discussing those risks real-time.

  9. Mission LBU The Netherlands(3) • We will not duplicate the auditing activities performed by other (internal audit department, external auditor) supervisors. Our audit efforts will predominantly be directed at testing the quality of their work and whether the control framework in the company functions as it should. In the case the taxpayer has a poor quality tax control framework and/or is not fully and actively transparent we will have to audit retrospectively and using different techniques.

  10. Overview of horizontal monitoring • Background horizontal monitoring • Forms of horizontal monitoring • Changes in focus • Individual convenants • Tax Control Frameworks • Changes in work and thinking

  11. Background horizontal monitoring • Report Scientific Advisory Council of Government Policy (WRR): The future of the national constitutional state (2002) • Program other government bodies, reducing rules, better performances and more own responsebility of the society

  12. Forms of horizontal monitoring • Individuals: prefilled tax returns and personal domains • Small enterprises: tax returns based on a convenant with their tax intermediaries or based on convenants with their line of business • VLE / MLE: individual forward convenants • Developers of software: review of new products • Customs: Certificating

  13. Conversations with tax directors • Way through times of TA decisions are points of attention; tax directors have to decide fast • Open attitude (the willingness to come to solutions) is important • A one stop approach of TA is important for enterprises • Open documentation rules create uncertainty

  14. Change of focus • Essential for the horizontal treatment strategy is the understanding of the concerns and needs of the businesses • Certainty for multinational enterprises is more important than tax rates

  15. Different approach in audits • We don’t look for faults and mistakes but • we ask the taxpayer to explain how he composes the tax returns • not only for the company income tax but • for all tax heads • The faults and mistakes are useful to test the tax control framework

  16. Very large enterprises • Forward compliance agreements (enforcement convenants) on an individual basis • Ongoing deliberations with organizations of Tax Intermediaries and Large Enterprises • Development of tax control framework as a part of the business control framework based on ‘Simons’ and COSO

  17. Very large enterprises (continued) • Tax Assurance Courses on the Business University Nyenrode together with tax advisors, CEO’s and CFO’s of VLE’s. • Intervision and training courses between regional offices to stimulate staff rapidly growing in these issues • Masterclass training courses in negotiation and co-operation

  18. Tax Control Frameworks (1) • Letter of the Secretary of State of 9 juni 2006 “I would like to emphasise that the main basic premise is that enforcement convenants are concluded with businesses whose tax control frameworks are solid, shaped by IFRS standards and the USA SOX act.”

  19. Tax Control Frameworks (2) • Principle based and not rule -based • Also attention for the soft controls • Intensity of supervision is based on the design, existance and working of the TCF

  20. Enforcement convenants VLE • Agreement of the way and intensity of monitoring • All tax heads and collection • Within the laws, policy and jurisprudence • Rights and obligations remains unchanged • Kernal: mutual trust, understanding and transparency

  21. Contents of a convenant • VLE: mentions the actual fiscal risks of certain importance; gives facts and view on juridicial aspects • Personal domain of the parties • Tax inspector gives in time and clear information about the position of the TA • Tailormate approach within the limits of the unity of enforcement • It is legal to disagree and to start a lawsuit • Questions of the past are solved as part of the convenant

  22. Changes in work and thinking • Now: • Vertical supervision  distrust • The TA has to look or all the taxpayers has filled in their tax returns correctly • Intense job (wrong allocation of labour force) • Future: • Horizontal monitoring  trust • Lean on other supervisors (Public organizations, Corporate Governance, other monitoring parties, etc.) • Distinction between compliant and non compliant taxpayers

  23. Expected effects • Effective en efficient • Fast and reliable certainty • Reducing administrative burden • Better settlement climate for enterprises • More attention from management for the business processes and sustained understanding of ongoing tax risks

  24. 12. Workshop • Develop a vision / mission statement for your Large Business unit • Identify the most important requirements needed to successfully implement this mission statement

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