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.

Phase 1: Preparation phase

Milestones: Compliance and Kick-off

In the preparation phase, you will gain an initial impression of the current state of compliance and governance capability of your tax function.

Together with you, we will then define the goals and focus areas of your Tax control framework. The top objective is compliance, including the documentation function. However, before developing a TCF, it is advisable to define secondary objectives to be taken into account in the process adaptation. These are regularly the tax planning and optimisation function as well as process optimisation in the course of the implementation. They may also include the complete realignment of your tax function into a governance function with the power to instruct and control. Above all, it is important that your system functions independently of specific individuals. In the case of internationally oriented companies, the control of the tax compliance of foreign subsidiaries by the parent can be a further objective. Together with you, we will draw up a project plan with milestones tailored to your needs.

Phase 2: Analysis phase

Milestones: Risk Analysis | Compliance, Risk Analysis | Tax and Process Analysis

At the key stage of the project, the analysis phase, not only will we analyse the compliance and governance capabilities of your tax function, but we will also conduct tax-specific risk analyses for all types of tax within the scope and jointly model / optimise your core tax processes.

From this, together with you, we will prepare a status quo assessment and depict this in a risk-control matrix. We develop a package of measures and a regular risk reporting.

As far as possible, we will build on your existing processes and jointly develop an organisational and procedural structure that meets the goals set. It is important to us that your TCF is not only legally compliant, but also practical, economically sound and efficient. For example, while increased use of software through a tax compliance tool to manage tax risks can be helpful in principle, we will aim to tailor our approach and only employ the means that correspond to the specificities of your company. Less is often more and we pay attention to the right sense of proportion.

Phase 3: Implementation phase

Milestones: Description of TCF | Implementation recommendations and implementation

The subsequent implementation phase will serve to consolidate all findings gained within the project and to operationalise the implementation measures. A TCF description combines all components of your TCF, serves as a holistic formal description of your TCF and forms the basis for reliable documentation for the tax authorities (e.g. tax audits) or auditors (e.g. certification of the TCF). In addition, you will receive clearly understandable, practical and modern implementation recommendations. Depending on the consulting package you choose, these are developed with or without our support and transferred into your regular operations accordingly.

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