PKF FASSELT SCHLAGE
Tax Compliance Management System

Tax Compliance Management System

Part A: Take advantage of opportunities and avoid risks with the aid of the Four Phase Model

PKF has developed a method that in particular meets the needs of medium-sized enterprises. This starts with an analysis of the tax compliance and then systematically identifi es and assesses tax risks. Here, the “PKF Tax CMS Tool“ provides support - it is based on Excel and can be used outside of an ERP system. In the Focus section of this issue we begin our series on Tax Compliance Management Systems with two contributions. First of all, we discuss not only the risks that can be managed through such systems but, likewise, the opportunities that can emerge from focusing intensively on processes and interfaces. Subsequently, we provide an overview of the Four Phase Model that has been developed by PKF and the PKF tool that can be used in the process.

Read more in PKF newsletter 06/2018.

Part B: Compliance Analysis
(Phase I of the PKF Model)

The current tax compliance status for a company is recorded in Phase I of our tax compliance model (please see the May issue of our newsletter for a complete overview). In the course of this, it is ascertained at a high level whether or not action is required in any of the divisions. On the basis of interviews and checklists an assessment is then made of how strongly the seven elements of tax compliance have already been developed. The nature, extent and definition of the rules and measures are scrutinised along with the documentation. Here, the scrutinisation as well as the assessment of the Tax CMS are conducted on the basis of standard modules while taking into account the company’s individual tax risks.

 Read more in PKF newsletter 07/2018.

Part C: Risk Analysis using the example of the GoBD (Phase II of the PKF Model)

In Phase I of the PKF Model – tax compliance analysis – which we described in our last newsletter, a rough analysis is performed of the standard modules for the (German) Principles of Proper Keeping and Retention of Accounts, Records and Documents in Electronic Form as well as Access to Data (abbreviated in German to GoBD), including documentation relating to procedures and processes, VAT, payroll tax/social security, tax on earnings and deferred taxes, international tax law and transfer prices. The result of Phase I is a decision as to which modules are going to be analysed in detail in Phase II (please see the May issue of our newsletter for a complete overview). Phase II, first of all, consists of an analysis of the extent to which there are controls and measures for the individual risks in the selected modules in order to reduce the amount of a potential loss as well as the probability of these risks occurring. In the following section we outline how documentation relating to procedures and processes should be organised for the GoBD module in order to ensure tax compliance in this respect. Process documentation is particularly important here as, for almost all businesses, it forms the basis for the other Tax CMS modules.

Read more in PKF newsletter 08/2018.

Part D: Risk analysis using the example of payroll tax/social security (Phase II of the PKF Model)

Following the presentation, in our last newsletter, of Phase II of the PKF Model using the example of the (German) Principles of Proper Keeping and Retention of Accounts, Records and Documents in Electronic Form as well as Access to Data (GoBD), our series now continues with examples from the payroll tax/social security area (please see the May issue of our newsletter for a complete overview). For this area, too, we describe the requirements for the necessary documentation relating to procedures and processes in order to ensure tax compliance.

Read more in PKF newsletter 09/2018.