1st Edition
Tax Compliance and Risk Management Perspectives from Central and Eastern Europe
The concept of tax compliance is as old as the tax itself, but staying compliant with tax regulations has become increasingly demanding. A changing tax regulatory environment, resulting from regulatory actions of the OECD, the European Union and national governments, poses many problems for tax compliance awareness. This book explores various approaches to improving tax compliance. Starting with the procedures and processes that are at the centre of the debate, it includes the level of tax position security obtained as a result of cooperation between tax administration and an organisation, ending with tax compliance requirements imposed by one-sided action of tax administration. Offering an experience and evidence-based analysis of how tax compliance influences an organisation’s tax and financial position, the issues are examined from both a theoretical and a practical perspective, using empirical research and case studies with an international dimension for illustration. Emphasising a holistic approach to tax compliance and its role in tax risk management within an organisation, this study offers a framework for making the challenging task of tax compliance and risk management more effective and more efficient. Exploring tax compliance focusing on the tax world after the BEPS project and anti-tax evasion and anti-tax avoidance regulatory actions undertaken by the European Union and OECD, the book has a practical focus on tax system design within the organisation and will be of interest to students, researchers and practitioners working in the areas of tax law and tax compliance.
Introduction
Katarzyna Kimla – Walenda, Piotr Karwat, Aleksander Werner
Chapter 1. Concepts of tax compliance management – theoretical context and regulatory sources
Bartosz Makowicz, Bartosz Jagura
Chapter 2. Tax compliance – development of the concept and change of approach
Jarosław Wierzbicki, Aleksander Werner
Chapter 3. Tax compliance environment within the organisation – the current system status
Anna Stępniak, Piotr Karwat
Chapter 4. Tax compliance procedural instruments – applied by the tax administration – Polish-specific system design and its international context
Jarosław Wierzbicki, Piotr Karwat
Chapter 5. Tax compliance in the GAAR environment
Aleksander Werner, Jarosław Wierzbicki
Chapter 6. Corporate income tax (including withholding tax) related compliance instruments
Aleksander Werner, Ewa Gwardzińska
Chapter 7. Value Added Tax related compliance instruments – international perspective and Polish specific solutions
Piotr Karwat, Katarzyna Kimla-Walenda
Chapter 8. BEPS-based specific tax compliance instruments
Katarzyna Kimla-Walenda, Piotr Karwat
Chapter 9. TP related tax compliance instruments (internal: Tax and TP framework, APA, MAP)
Anna Stępniak, Katarzyna Kimla-Walenda
Chapter 10. Horizontal cooperation/compliance monitoring programmes – comparative analysis of international and Polish solutions
Katarzyna Kimla-Walenda, Anna Stępniak
Chapter 11. Tax and TP disclosures as a tax compliance instrument
Anna Stępniak, Jarosław Wierzbicki
Chapter 12. The AEO system as a diagnostic and verification tool for compliance with customs legislation
Ewa Gwardzińska
Chapter 13. Tax compliance assurance
Piotr Staszkiewicz, Aleksander Werner (corresponding author)
Summary
Aleksander Werner, Piotr Karwat, Katarzyna Kimla – Walenda, Jarosław Wierzbicki
Index
Biography
Piotr Karwat, PhD, is a lecturer/assistant professor at the SGH Warsaw School of Economics, Collegium of Business Administration, Department of Administrative and Financial Corporate Law. His research and academic interests focus primarily on taxation in the business context, taking into account the economic and legal conditions and consequences of taxation. He received the degree of Doctor of Laws, with a dissertation on tax avoidance (“Tax avoidance – the essence and ways of counteracting this phenomenon”). This issue, and especially the relationship between anti-avoidance regulations and other anti-abuse norms (e.g. transfer pricing), is still in the sphere of his interests, as evidenced by his latest publications. Regardless of this, his research now focuses on the indirect tax system, particularly in the context of international trade, which is reflected both in his publications and in the academic sphere. Many years of professional practice in the field of tax consultancy (as part of his work as a legal adviser) has also given him an opportunity to observe the practical (economic) effects of public levies on the activity of enterprises.
Katarzyna Kimla-Walenda, PhD, is a lecturer/assistant professor at the SGH Warsaw School of Economics, Collegium of Business Administration, Department of Administrative and Financial Corporate Law. Her research and academic interests include primarily the issues of law and economics, as well as tax avoidance and tax evasion countermeasures. Professionally, for more than 10 years she was associated with the area of taxes and finance. She gained professional experience in the largest tax advisory firms dealing with mergers and acquisitions and ongoing business tax advisory. She also has experience in finance gained in one of the largest companies in the FMCG sector. Currently, she is associated with the Ministry of Finance where she has participated in both legislative and regulatory impact assessment projects and cooperated with the International Monetary Fund and OECD.
Aleksander Werner is Professor at the SGH Warsaw School of Economics, Head of the Department of Tax and Customs Law. He is a lecturer in tax and competition law and the author of many publications in his field of expertise. He is also an attorney-at-law and has provided legal advice on many Polish and international projects concerning among others: financial and mining sectors, infrastructure and energy, state aid and environmental protection.
The book takes up an extremely important and current problem concerning, on the one hand, the phenomenon of tax avoidance and evasion, which has been increasing in recent years, and, on the other hand, the reaction to it by state authorities in the form of normative measures aimed at combating and counteracting it. Therefore, when planning their economic strategies, including tax strategies, business entities should be able to recognise and assess the tax risk associated with the use of these measures. The aim of the book is to provide readers with an up-to-date and in-depth understanding of both theoretical and practical aspects of tax compliance, including how it fits into tax risk management. The analysis undertaken in the book perfectly combines theoretical and practical aspects and places particular emphasis on the latter through the use of empirical research or case studies.
The authors discuss the most relevant practical areas of tax compliance that taxpayers should pay particular attention to, which may significantly improve their cooperation in the tax collection process. It is also worth emphasising that all these tendencies and phenomena are shown from the taxpayer's perspective, which is aimed at strengthening and securing the taxpayer's position in relation to state authorities. In addition to a strong focus on the Polish tax system, the book also takes into account the comparative law aspect, which is important for taxpayers operating in two or more tax jurisdictions and allows the readers to assess the Polish regulations in this respect. The multifaceted approach to tax compliance issues should also be emphasised. The subject of tax compliance is analysed among others in the context of procedural instruments, the GAAR environment, corporate income tax, value added tax, BEPS-based instruments and transfer pricing. The book may be recommended both to those readers who seek to gain more insights into various aspects of tax compliance and risk management, and to practitioners who will find valuable tips they can use in their business or tax consulting.
Prof. Hanna Litwińczuk, Warsaw University
The research subject of the monograph contains the latest knowledge, presented in an original and creative manner, and constitutes a valuable voice in the ongoing scientific debate on the concept of tax and customs law compliance in its two key aspects. On the one hand, the analysis focuses on tax avoidance and evasion and the drivers behind the behaviour of businesses, while on the other hand, on the measures taken by public administration authorities in this regard. The analysis of this research issue is very complicated as it is an extremely changeable research field, which requires not only constant attention of researchers and the ability to react quickly to rapidly changing legal regulations, but also taking into account the practice of economic entities operating in the market. As the authors rightly point out, while offering valuable de lege ferenda conclusions, “legislative initiatives taken in response to the continuing pressures caused by the phenomenon of globalisation, the activities of holding companies and tax competition will not be sufficient, as they generate the emergence of new tax risks, an increase in obligations related to the tax function, and at the same time do not eliminate the problem of tax base erosion, the elimination of which can take place in a manner that ensures harmonisation of tax rates or through the introduction of new tax solutions.”
It is worth emphasising here the interdisciplinary approach to the research problem with a unique approach to the research analysis carried out, as the legal and legal-economic and financial elements are presented here in connection with the direct and indirect aspects of the external and internal environment of tax and customs strategy management. This undoubtedly enriches the scientific discourse and contributes to the development of the scientific discipline, not only of management, but also of law in the branch of tax law and business law as well as economics and finance, and in addition it can also contribute to law-making in the area of tax.
The publication can be of great use to a wide range of researchers, not only academics but also practitioners active in the field of organisational management in tax matters and legislators drafting tax and customs laws. Although the analysis focuses on the perspective of the Polish tax system, it provides a comprehensive analysis of tax compliance solutions that can be implemented in isolation from the national legal system.
Prof. Wiesław Czyżowicz from SGH Warsaw School of Economics
