Tax Accounting and Compliance
Trade and tax is involved in calculating tax positions, preparing tax returns, including those for Dutch VAT and corporate income tax purposes and advising on matters related thereto, such as arranging (risk) analysis for reports or for enforcing covenants in horizontal monitoring and ‘Authorized Economic Operator’ (AEO) certificates (i.e. Administrative Organization and Internal Control – AO/IC).
We can assist you in meeting your Dutch tax compliance obligations and requirements, analyzing taxable statuses and related risks, identifying applicable taxes, calculating tax liabilities, maintaining tax accounting registers and preparing tax reporting documents. In addition, we can provide assistance in the review of prepared tax returns and registers, including second opinions.
To give you an example, “part of our compliance procedure is explaining the corporate income tax return using a separate and comprehensive report. This report contains explanations on the tax positions taken as well as the reconciliation from the statutory accounts to the corporate income tax return itself”.
Tax risk management
Risk management has become one of the top priorities of businesses, and so has tax risk management for their tax departments. These departments have the increased responsibility to manage and anticipate (potential) tax risks and have become (co-)responsible for the requirements these businesses have to meet in this respect.
Compliance agreements (‘in control’)
In addition, businesses that have already concluded or would like to conclude compliance agreements (horizontal monitoring agreements) with the Dutch tax administration have to be ‘in control’, as their working methods are changing from vertical monitoring towards horizontal monitoring.
Although vertical monitoring will not disappear entirely, horizontal monitoring becomes more important. Where vertical monitoring is based on checking retrospectively, horizontal monitoring is a form of working in the present based on mutual trust, understanding and transparency between the taxpayer and the Dutch tax administration.
Horizontal monitoring consists of two elements. On the one hand, a good relationship between the taxpayer and the Dutch tax administration which is recorded in a compliance agreement (horizontal monitoring agreement) and/or an AEO certificate. On the other hand, good risk detection, which is based on what is known as the ‘Tax Control Framework’ (TCF).
Tax Control Framework (TCF)
Such tax control framework includes, amongst others, a determination and description of a business’ tax strategy, tax department and tax related processes, determination of who is responsible for what tax matters, a tax risk analysis, the implementation of relevant controls and policy as to the use of the information obtained with these controls and – last but not least – a periodical update of the tax control framework.
We focus on horizontal monitoring, (the negotiation of) compliance agreements and the advisory services related to the implementation of an AEO certificate and/or a tax control framework.
Contact Trade and tax
Trade and tax is a multi-disciplinary tax services provider, ready to assist you with various tax related matters. Want to know more about us, or want to work with us? Visit our contact page.