Nairobi, 14 – 18 February 2011
description
Transcript of Nairobi, 14 – 18 February 2011
![Page 1: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/1.jpg)
Centre for Tax Policy and Administration
Organisation for Economic Co-operation and Development
Large Taxpayer Units
18. Organizational Structures and Work Arrangements including Staffing and Skills and expertise required for Large Business Units
Nairobi, 14 – 18 February 2011
![Page 2: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/2.jpg)
Organization of Large Business Units
Large Business Units are headed by senior executives and management teams including special advisors
Special advisors and members of management teams are each responsible for specific areas such as compliance research, international, etc.
Compliance operations of large taxpayers divisions or units are structured on an industry segment basis reflecting the main business activities of the economy
2
![Page 3: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/3.jpg)
Major Industry Segments and Special Units in Large Business
Finance/Banking/Insurance Communication Technology Natural Resources/Oil & Gas Retail/Pharmaceutical/Medical Heavy Manufacturing/Transportation Building and Construction Shipping
3
![Page 4: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/4.jpg)
Reasons for industry-focused units
Specialisation Building knowledge on industry specific issues Improving commercial awareness Understanding of industry practises and issues Delivering a better and more focused taxpayer
service Designing, developing and implementing
compliance programs including educational activities to help taxpayers understand industry specific tax responsibilities
Conducting research
4
![Page 5: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/5.jpg)
Special units in addition to industry units
Performing risk analysis and intelligence gathering
Providing technical advice (by industry or by issue such as transfer pricing, anti-tax avoidance)
5
![Page 6: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/6.jpg)
Organizational arrangements for international taxwork
Most Tax Administrations have a dedicated unit (at headquarters or elsewhere) responsible for international administrative policy
In most countries this includes the responsibility for the implementation of international tax policy and the advance assessment on feasibility and enforceability of new rules and regulations.
Usually countries have a dedicated unit responsible for the competent authority function to coordinate the exchange of information and assistance with recovery of tax debts.
6
![Page 7: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/7.jpg)
Organizational features of international tax work
Dedicated units responsible for international administrative policy are also responsible for the performance of the role Tax Administrations have in the process of treaty negotiation in 50 percent of the surveyed countries.
More than fifty percent of Tax Administrations have dedicated units for sharing information / knowledge management in the area of international taxation.
One third of Tax Administrations in surveyed countries have a dedicated unit responsible for providing information / account management for potential foreign investors and or similar activities.
A large majority of the Tax Administrations have centralized the managing of the tax affairs of large multinational taxpayers in a dedicated organizational unit existing of one or more offices.
7
![Page 8: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/8.jpg)
Work-force resources, skills, and competencies required
The degree and scope of the resources used in the large business unit vary strongly from one country to another. Identifying factors include:
The number of large taxpayers The criteria used to identify large taxpayers The complexity and nature of the large taxpayers The scope of functions performed within the large business
unit The type of taxes administered The level of audit and taxpayer service activity performed The range of technology used.
8
![Page 9: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/9.jpg)
Number of LBU staff as percentage of total staff
The number of employees working in the large business unit as a percentage of total staff ranges from 0.75 percent to 6.6 percent
The total number of staff is influenced by many other factors (value of this indicator therefore limited):
Number and type of taxes administered Other tasks of the Tax Administration Complexity of legislation Type of economy Seize of the country Population (number/type/education/age etc) Development stage Use of IT Tax morale
9
![Page 10: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/10.jpg)
Numbers of staff in LBU
Country Number of staff LBU
% of total staff
Australia 891 4.0
Canada 1,366 3.4
France 800 1.0
Ireland 237 4.0
Netherlands 750 2.5
Norway 55 0.8
UK 1,694 4.5
US 6,243 6.6
10
![Page 11: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/11.jpg)
Tax Administration staff usage for international tax work
With a very few exceptions Tax Administrations
have concentrated all activities around their involvement in the processes of international tax policy and legislation and tax treaty work and exchange at Head Quarters
The numbers of staff involved are quite limited varying from 1- 6. There is hardly any involvement of operational staff at (local) offices in this process.
11
![Page 12: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/12.jpg)
Improving the training of tax officials on international tax issues including the secondment of officials from one
administration to another
Recommendations to improve expertise in and training on international taxation:
Knowledge sharing Co-operation with universities and other
educational institutions Induction training programs other
12
![Page 13: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/13.jpg)
Knowledge sharing
Create and strengthen the role of knowledge and co-ordination groups of experts in international taxation, including the use of modern communication technology such as intranet
Build and strengthen networks of contact persons throughout the organization to ensure inputs from the organization as a whole and to provide support to staff tasked with activities that cannot be centralized
Ensure access to dedicated international documentation systems
Initiate pilots to conduct joint audits
13
![Page 14: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/14.jpg)
Co-operation with universities and other educational institutions
Building and strengthening relationships with universities, business schools to encourage these institutions to include sufficient elements of international taxation in their study programmes
The same approach should be adopted for regulatory bodies such as accounting and legal organizations accountants
14
![Page 15: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/15.jpg)
Induction training programmes
Include aspects of international taxation in induction training programmes for all officials who will likely be involved in international tax work
Consider including officials who may infrequently be involved in aspects of international taxation work to ensure they have an awareness of international taxation issues
15
![Page 16: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/16.jpg)
Other recommendations on training
Concentration of international tax work in dedicated units at headquarters and in centralized dedicated organizational units for the managing of the tax affairs of large multinational taxpayers. These units need to have a sufficient size to be effective and sustainable
Facilitate staff learning foreign languages (English) and to participate in training programs (in foreign languages) offered by external institutions
Improving participation in international organizations by ensuring that the right people participate and attend meetings and by monitoring the participation through clear mandates and evaluation
16
![Page 17: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/17.jpg)
Centre for Tax Policy and Administration
Organisation for Economic Co-operation and Development
Large Taxpayer Units
18. Organizational Structures and Work Arrangements of Large Business Units
The Netherlands
Nairobi, 14 – 18 February 2011
![Page 18: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/18.jpg)
18
Facts and Figures
• Income taxpayers 10.223.000
• via paper 17%
• via floppy disk 9%
• via internet 74%
• Corporate taxpayers 750.000
• VAT taxpayers 1. 316.000
• Wage taxpayers 595.000
• Motor vehicles 10.944.000
![Page 19: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/19.jpg)
19
Taxes and Charges collected by DTCA (2007):
• Income / Wage tax
40• Corporate tax
19• VAT / excise duties
52• Import duties
2• Environmental tax
4• Motor vehicle tax
3• Other taxes
15• Social Securities
32• Total
162• Budget TCA
2.5
(€ bn)
![Page 20: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/20.jpg)
20
Structure of the Ministry of Finance
MinisterMinister State SecretaryState Secretary
Secretary-GeneralSecretary-General
Directorate-Generalfor Tax and CustomsPolicy and Legislation
Directorate-Generalfor Tax and CustomsPolicy and Legislation
Directorate-Generalof the Budget
Directorate-Generalof the Budget
Directorate-Generalfor the Tax and Customs
Administration
Directorate-Generalfor the Tax and Customs
Administration
General TreasuryGeneral Treasury
![Page 21: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/21.jpg)
21
Directorate -General for the Tax and Customs Administration
(DGBel)
Management TeamManagement Team
Innovation andDevelopment
Innovation andDevelopment
Enforcement policy
Enforcement policy
Private taxpayers andprocedural law
Private taxpayers andprocedural law
Business taxpayersBusiness taxpayers
Customs andenvironment
Customs andenvironment
CassationCassation
InternationalAffairs
InternationalAffairs
OperationalManagement
OperationalManagement
PersonnelPersonnel
Legal AffairsLegal Affairs
Support and facilitiesSupport and facilities
Managementteamsupport
Managementteamsupport
Internal Accountancyunit
Internal Accountancyunit
![Page 22: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/22.jpg)
22
CustomsCustoms
Privatel TaxpayersPrivatel Taxpayers Small/ medium
companies (North)
Small/ medium companies (North) Small/medium
companies (South)
Small/medium companies (South) Large & multinational
companies
Large & multinationalcompanies
Tax and Customs Administration
Special directoratesSpecial directorates
• Computer/network service’/ Software development
• Fiscal/Economic Information and Investigation/
• Training, knowledge and Communication • Facilities Services
• Process and Product development
Operational divisions
80 district offices
•REGISTRATIO
N
•AUDITING
•COLLECTION
•INVESTIGATIO
N
•SERVICE
•ASSESSMENT
main processesmain processes integratedintegratedapproachapproach
![Page 23: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/23.jpg)
Structure and role of the Large Business Units
The units or teams are branche-oriented
•for example: industries, transportation, trade, etc.
Advantage:
•more knowledge about the target group
•single desk for all tax affairs
•compliance
•higher quality of audits
23
![Page 24: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/24.jpg)
Structure and role of the Large Business Units
Each team deals with 40 - 60 entities The units or teams are branche-oriented The entities are registrated in the Client
information system (IKB) and the transparent risk assesment system (ATK)
The team gives each entity the treatment according to its tax importance and tax risks
24
![Page 25: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/25.jpg)
Structure and role of the Large Business Units
Integration on team or unit level Processes
•assessment, collecting and auditing Taxes
•income tax, company tax, value added tax and wage tax
‘Small’ taxes, like dividend tax and capital tax are treated by specialised groups in the tax office
25
![Page 26: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/26.jpg)
Structure and role of the Large Business Units
Each entity has a account manager He is resposible for:
•a correct and actual picture of the entity
•keeping the treatment plan up-to-date•long range treatment
•coming year treatment
•input to the team plan•depth of treatment
•to propose audits when necessary
26
![Page 27: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/27.jpg)
Structure and role of the Large Business Units
Personnel:
•50% academical
•managers
•legal specialists
•financial-, EDP-, statistical auditors
•account managers
•30% middle educated employees
•the same activities, but lower taxexposure
•20% administration Each employee has a personal computer with
access to the national systems27
![Page 28: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/28.jpg)
Tasks Account Manager
Risk management Treatment Plan Entity overview & monitoring progress Internal and external Relationship
management Company meeting Provisional assesment Preliminary consultation Assessment
28
![Page 29: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/29.jpg)
Tasks Tax Auditor
Preliminary consultation Preliminary investigations National projects Fraud projects Training and education Other
29
![Page 30: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/30.jpg)
Tasks Tax Inspector
Assessment Assessment after audit Appeal Preliminary consultation Fraud projects National projects Training and education Other
30
![Page 31: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/31.jpg)
Staffing
Total number of employees in the DTCA is 30.000
Total number of employees in the LBU’s is 750, i.e. 2,5%
31
![Page 32: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/32.jpg)
Staff in LBUs:
•50% academical
•managers
•legal specialists
•financial-, EDP-, statistical auditors
•account managers
•30% middle educated employees
•the same activities, but lower taxexposure
•20% administrative support Each employee has a personal computer with
access to the national systems
Staffing
32
![Page 33: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/33.jpg)
Education
Tax Assurance Courses on the Business University Nyenrode together with tax advisors, CEO’s and CFO’s of VLE’s.
Collaboration with several universities for training programs on taxes and auditing for tax-, EDP-auditors, tax-inspectors etc.
Also collaboration with business schools for “training on the job” programs
Because of the new strategic approach a strong need of training on social skills
Masterclass training courses in negotiation and co-operation
33
![Page 34: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/34.jpg)
Training on social skills
New strategy (more cooperative, preventive, instead of repressive)
More cooperation between the employees (working as a team)
More cooperation with the LBU More internal sharing of knowledge Main focus: trust, transparancy and
understanding. This takes a total new way of thinking. Not only with the tax-employees, but
also with the taxpayers, and the intermediaries (for instance KPMG, Trust Rules)34
![Page 35: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/35.jpg)
Hypegiaphobia,Trust rules (KPMG)
1. Make contact personal2. Define common goals3. Set the right example4. Built trust with sensible rules5. Share responsibility and trust6. Stay on course and keep calm, even
when things go wrong7. Rely on informed trust, not on blind
trust8. Be mild onmistakes but crush abuse9. Dear to experiment and learn from
experiences35
![Page 36: Nairobi, 14 – 18 February 2011](https://reader036.fdocuments.net/reader036/viewer/2022062408/5681449c550346895db14c0d/html5/thumbnails/36.jpg)
Knowledge Sharing
pilots with joint audits, with tax-auditors, tax-specialist and account-managers
expert- or knowledge groups: EG Very Large Enterprises, EG Tax/EDP/Statistical Audit/ EG International Fiscal Affairs, etc
intervision between audit teams, LBU’s: learn from each other, best and worst practices
a lot of experimenting, a lot of mistakes, but a lot lessons learned.
reactions of the taxpayers are quite positive!
36