Examinations and Collection Abroad

Marian Bette

CIAT correspondentNetherlands Tax and Customs Administration

Buenos Aires, 24 april 2013

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Content of presentation

• International cooperation between tax administrations

• International Tax Audits

• International Tax Collection

International Cooperation

Statutory framework for international cooperation - national legislation- bilateral treaties and TIEAs- multilateral regulations

Organizing international cooperation- 1 central liaison office: competent authority for exchange of information on taxes and collection- 1 Expert Group International Tax Auditing- Expert EoI contactpoints in tax offices

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International tax audits

Statutory building blocks•Assistance in person/presence of officials abroad•Simultaneous tax audits

International Frameworks •Bilateral agreements with Belgium and Germany •Multilateral Controls in EU•Joint audits

Bilateral agreements Belgium & Germany

• Intensify cooperation with neighbouring countries

• CA-mandated officials

Multilateral Controls (EU)

Key elements

- Memberstates agree

- coordinated financial control

- of one or more related taxable persons

- control has complementary or common interest

Organization framework

- MLC coordinator in each Member state

- audits carried out by local auditors in conjunction with CA

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MLC: Steps

Key steps

- initiative

- start up meeting: strategy -> intra community control plan

- execution of the audit

- concluding meeting -> joint report

Key goals

- ensure correct tax (EU and national legislation)

- MLC is part of standard audit activity

- share knowledge about audit practices

- test and improve MLC procedures

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MLC: Facts and Figures

NL participates in 20 new MLCs annually (65% initiative of NL)

2011 topics: internet services, alcoholic beverages, carrousel fraud,

real estate, migrant labour and second hand cars

2011 revenue: 583 million euro in tax & 18 million euro in penalties

Revenue for Netherlands: 68 million

5 cases no Dutch assessments but valuable EoI

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H M Revenue & Customs

 

FederaleOverheidsdienstFINANCIEN

Finanzamt für Großbetriebsprüfung

MLC: Lessons learnt from practice Taxes

VAT

Income Tax

Behavioural effects

Decrease in use of avoidance schemes

Structural contacts between Tax Auditors

Other effects

Direct line of communication improves quality of exchanged info

450 requests for information with average reply in 3 weeks

280 spontaneous exchanges of information & guaranteed use

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Taking simultaneous audits outside Europe

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Joint audits (FTA)

Key elements

- two or more countries joining: single audit team

- examine crossborder transactions/issues

- joint presentations to & shares information with countries

- CA on the team

Main objectives

- added value

- common or complementary interest

- domestic audit not sufficient: obtain a complete picture

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Joint audit: Steps

Key steps

- preparation process

- selection process

- planning meeting

- auditing process

- joint information requests

- examinations

- meetings with taxpayer

- final stages : concluding meeting and joint report

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International tax audits - recap

• Completing the puzzle

• Linking CA and Auditor expertise

• Agreement on procedural steps

• Awareness legalities

• Communication, communication, communication!

Collection abroad

Policy

Policy: incorporate broad mutual assistance provisions on the

collection of taxes in all relevant international instruments &

apply them in practice

Framework• Broad tax collection assistance under the EU Directive

2010/24/EU (as of 1-7-2013: 28 EU members)• Non EU countries: 25 DTC’s with tax collection provision • Multilateral convention (reservations on tax collection)

Effective cooperation in collection

Considerations: workload and reciprocity

Solution:- step by step approach- direct approach

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Dutch farmers abroad with tax debts

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Case in brief

1. Work with treaty partner: agreement on permission to directly contact tax debtors

2. Extra measure: contact with banks and help for tax debtors 3. And in the Netherlands: passport alert and threat of

imprisonment

Results

- More than 90% of the farmers paid their taxes- Regarding the others, further assistance from treaty partner- Finally, with some exceptions, all have paid

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Lesson learnt : be creative and innovative

Benefit: not over-burden treaty partner

This approach may be viable ifthere is a huge imbalance in factual reciprocity it is about a high number of tax payers with substantial debtsit is not possible for the treaty partner to collect by applying

less burdensome collection measures

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GRACIAS!