The tax strategy should include information on the taxpayer's approach to fulfilling tax obligations, e.g., applied procedures and actions which may affect the amount of tax liabilities. It should also include, inter alia, transactions with related parties, tax settlements with tax havens or requests for tax law interpretations submitted to tax authorities.
The disclosure of such detailed information aims, on the one hand, at ensuring tax transparency but, on the other hand, it may expose companies to the risk of more frequent tax audits.
According to the Income Tax Act, the following entities are obliged to prepare and publish information on the implemented tax strategy:
For capital groups, the tax strategy must cover both the group and all group companies.
The report on the tax strategy implementation should be published on the taxpayer's website or on the website of any related entity (if the taxpayer has no website). At the same time, information on the publication of the strategy should be provided to the head of the tax office.
The tax strategy report should be published within 12 months upon the end of the tax year.
The preparation of a tax strategy report must both meet statutory requirements and also guarantee the security of the taxpayer sharing sensitive information. It is important to remember that the reporting obligation concerns the implementation of the tax strategy, not the strategy itself.
According to Crowe experts, one of the basic elements of the company's tax strategy should be the so-called due diligence procedures for particular taxes, which cover the company's organisational model. These procedures will allow for current internal control of the areas covered by the tax risk in a company, and thus minimise the risk of making significant errors in tax settlements.
Crowe experts offer comprehensive support in preparing your tax strategy and reporting on its implementation:
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