Tax Governance

What is tax governance?

Tax governance refers to policies, practices and procedures regulating tax compliance in a company. It encompasses the entirety of tax processes, including roles, responsibilities and internal controls. Tax governance supports effective compliance management and oversight. A tax governance policy is recommended by OECD and constitutes evidence of due care.

Benefits of a tax governance policy:

• Robust tax governance ensures tax obligations are complied with accurately and on time.
• Tax management certainty. A well-structured tax governance framework provides management with access to reliable information and full oversight of tax matters, enabling informed decision-making in the area of taxes.
• Tax risk management. Through proactive tax governance companies can responsibly identify, manage and mitigate their tax risks, including criminal tax risks, protecting both the organisation and its leadership.
• Reporting compliance. Tax compliance extends beyond tax payment. The law also imposes various disclosure and reporting duties, such as Mandatory Disclosure Rules (MDR) or tax strategy reporting requirements.
• A robust tax governance policy ensures stakeholders have access to accurate tax information. This is important for suppliers, customers, employees, investors and the public, especially in the context of ESG reporting and corporate social responsibility.
• Improved relations with tax authorities. A well-designed tax governance framework is important also for your dealings with tax authorities. It helps foster mutual trust and effective communication, demonstrating your good will and due care, which will work in your favour if it comes to a dispute with revenue authorities.

How we can help

• Formulating a tax strategy. Tax strategy shows the main tax policy directions, principles and objectives of your business. It refers to organisational culture, value endorsement and development of standards that translate into how the tax function operates and is managed.
• Drawing up a tax strategy report. Major taxpayers are required by law to annually publish a tax strategy report.
• Developing a tax governance policy. Tax governance policy is a document defining compliance powers, roles, responsibilities and tasks assigned to corporate boards, executives, and employees.
• Drafting tax policies and procedures. The tax function comprises all those actions, documents and instruments which enable the company to:
• identify all of its tax and reporting obligations,
• ensure those obligations are duly and timely complied with,
• pay the right amount of taxes and other public levies,
• operate in compliance with tax regulations.

In practice, the tax function should mainly be defined by means of tax policies and procedures.

• Develop a tax risk management policy. A tax risk management system is among the most important areas of tax governance.

The system is based on a tax risk management policy as a strategic document that defines the most important approaches to tax risk, identifies its sources, ensures orderly record keeping and systematically arranges risk management tools. It also shows what to do when a tax risk materialises.

• Co-operative compliance. SENDERO offers end-to-end support in joining and operating within the Co-operative Compliance Programme. For details, see HERE.
• Independent audit of the tax function. Required of companies wishing to join the Co-operative Compliance Programme, this audit targets tax compliance and the adequacy and effectiveness of the tax oversight framework implementation. For details, see HERE.
• Mandatory Disclosure Rules. MDR are about certain tax arrangements called tax schemes that need to be reported to tax authorities. We will be pleased to offer MDR assistance by:
• reviewing your business to identify tax schemes (MDR audit),
  • raising the MDR awareness in your firm,
• developing an internal MDR policy for you,
• supporting you in preparation and submission of MDR disclosures.

For details, see HERE.

Why Sendero?

Our Compliance Team successfully supported one of the largest tax groups from the construction industry on its road to the Co-operative Compliance Programme.

We offer experience and expertise that are unique nationwide:

• Our Compliance Team successfully supported one of the largest tax groups from the construction industry on its road to the Co-operative Compliance Programme.
• We have developed numerous tax strategies and tax strategy reports.
• We have drawn up dozens of MDR policies for Polish and foreign companies from various industries, including automotive, IT and leisure.
• Michał Wykurz, who heads our Tax Governance Practice, is ranked by the Rzeczpospolita among the best compliance specialists in Poland.