Who are the key regulatory authorities? How easy is it to deal with them and how long does it take to resolve standard issues?

Tax

Cyprus Small Flag Cyprus

The Tax Department within the Ministry of Finance was formed in 2014 by combining the Inland Revenue Department, which administers direct taxation and the VAT Service. They are being integrated, but for the time being they continue to operate separately in many regards.

As with many government departments in Cyprus, routine procedures, such as final agreement of tax returns and issuing of assessments, can take time. However, the department responds efficiently and constructively to ad hoc inquiries, requests for tax rulings and the like.

Greece Small Flag Greece

The key regulatory authorities are the General Directorate of Public Revenue an the Directorate For Dispute Resolution (Former Internal Review Unit). Many issues are solved a the local tax office level. For questions related to the interpretation of tax laws tax payers may refer to the relevant departments of the Ministry o Finance (VAT, capital taxes department, income tax department). There is a statutory obligation for public authorities to respond to applications of citizens within 50 days. In practice the time required for resolving standard issues is not predictable and delays are often very long and frustrating.

Turkey Small Flag Turkey

Ministry of Finance and Revenue Administration (which is also an organ of the Ministry) are the main regulatory authorities for tax legislation. However, one cannot resolve the standard issues with these authorities. When a problem/issue emerges tax payers commonly apply/resort to their tax office for the detail. But, if an assessment is made or about to be made against a tax payer following a tax inspection, s/he can apply to settlement commissions to minimize the tax/penalty burden.

Mexico Small Flag Mexico

Most tax related matters are dealt with the Tax Administration Service. In recent years, stringent criterions relating even to ´standard´ issues have been adopted, making it hard for taxpayers to comply with the authorities’ interpretation of the applicable tax laws. In this sense, procedures such as tax devolutions (particularly concerning value added tax), or the annulment of tax liabilities determined by the authorities often require strenuous efforts and, considering the several stages of proceedings available both for authorities and taxpayers, such procedures could take several months.

It should be kept in mind that other local taxes such as property taxes, payroll taxes or taxes on the acquisition of real estate ought to be dealt with local tax administrations or treasuries. In addition, other administrative authorities such as the Mexican Social Security Institute are also entitled to initiate audit procedures concerning employer contributions.

United Kingdom Small Flag United Kingdom

Her Majesty’s Revenue and Customs (HMRC or the Revenue) is the regulatory authority for tax matters. 2015/16 surveys show mixed outcomes, varying according to customer segment. Outcomes from large businesses are generally positive with 82% saying that they had a good experience overall with HMRC. Outcomes from agents acting for small businesses and individuals were less positive with 62% finding HMRC to be approachable and only 26% being satisfied with time taken by the Department.

The resolution of disputes with HMRC, particularly if leading to litigation, tends to be a relatively lengthy process. In 2012, HMRC published a commentary on its litigation and settlement strategy (LSS), the aim behind which was to provide a mechanism for HMRC to settle disputes in a non-confrontational and collaborative way. However, in practice, HMRC often approach disputes in a litigious and uncompromising manner, particularly in cases where the revenue exposure is high. This means that a large number of tax disputes still proceed all the way to courts and tribunals.

Gibraltar Small Flag Gibraltar

Administration of Gibraltar’s tax assessment, collection and enforcement is undertaken by the Income Tax Office, through the figure of the Commissioner of Income Tax.

Japan Small Flag Japan

The Japanese regulatory authority responsible for the enforcement of tax laws is the National Tax Agency (NTA) of Japan. The actual day-to-day tax laws enforcement in front of the taxpayers is made by the regional taxation bureaus and the district tax offices, which are lower administrative bodies of the NTA. There are 12 reginal taxation bureaus over Japan (with the largest one being the Tokyo regional Taxation Bureau) and numerous district tax offices. Generally, reginal taxation bureaus are in charge of middle to large size of corporate taxpayers having a stated capital of 100 million yen or more, while the rest is handled by district tax offices.

Dealing with these tax authorities involves two aspects: one is prior consultation and private advice that is typically sought before a transaction is undertaken, and the other is tax audit that is typically made after a tax return was filed. In the former case, it is generally easy to deal with the tax authority seeking its view, provided that its view is not binding and has no effect of estoppel. If the taxpayer wants a binding ruling, it must apply for an advance ruling in writing, however, this is not very common in practice as it generally takes substantial time (e.g., 6 months). As such, many taxpayers only undertake informal prior consultation even if it has no legally binding effect – practically this may suffice. So far as ‘standard’ issues are concerned, there are generally little difficulties in dealing with the tax authority. The process would generally take 1-2 months.

In the latter case of a tax audit, it is not uncommon that the position of the tax authority and that of the taxpayer are acutely different and extensive discussions are undertaken in the course of the audit, especially in cases involving alleged tax avoidance or in transfer pricing cases. Here, often ‘standard’ issues do not become a large issue because in many cases the outcome is clear without engaging in substantial debates. Rather, in tax audit, non-standard and unprecedented issues often become a key subject to be discussed. The length of tax audit varies from a case to case; routine tax audit on small taxpayers often finishes in less than a week, while transfer pricing audit on large corporate taxpayers often continues around two years.

Hong Kong Small Flag Hong Kong

The Inland Revenue Department (IRD) is responsible for administering the tax system in Hong Kong. Their motto is: ‘Tax by the Law, Service from the Heart’(!)

The IRD recently published a report analysing its performance against self-defined targets for various types of services or issues. The exercise will eventually be annual but for now the one report is found at: http://www.ird.gov.hk/eng/abo/per_tcp.htm. Please note that the gaudy numbers do not reflect how lengthy and complicated certain issues can become (particularly as it pertains to audits and investigations).

United States Small Flag United States

The IRS is a part of the U.S. Treasury Department and is the regulatory authority of the U.S. for tax. The most recently available survey from the IRS Oversight Board shows that in 2014, 74% percent of taxpayers were satisfied with their interactions with the IRS, a drop of 4 percentage points from 2013. The drop in satisfaction may be due to budgetary constraints that has somewhat limited the ability of the IRS to provide taxpayer services.

The length of time to resolve tax issues varies greatly and depends on the complexity of the issues. There is no standard amount of time that a tax dispute will take to resolve. Although the vast majority of tax disputes are settled prior to litigation, some disputes, especially those that go to litigation, can take years to resolve.

Spain Small Flag Spain

The Dirección General de Tributos (General Directorate for Taxation), which is dependent from the Ministry of Finance, is the body in charge of tax matters. More specifically, the Agencia Estatal de Administración Tributaria (Spanish Tax Authorities) deals with the collection of State taxes and the inspection of taxpayers.

It is possible to approach the General Directorate for Taxation to discuss a matter or even explore the feasibility of requesting a binding tax ruling. The process for obtaining such ruling takes time (no less than 3 months).

Austria Small Flag Austria

The Ministry of Finance (Bundesministerium für Finanzen) is the regulatory authority for tax matters. In Austria there are 40 local tax offices which represent the Ministry of Finance in 80 locations. The tax offices are entitled to collect taxes and also audit tax payers within their jurisdiction. Standard issues can usually be resolved by telephone or by e-mail exchange with the tax inspector in charge. Communication with the tax officials is easy and straight forward.

Germany Small Flag Germany

The highest authority dealing with tax matters in Germany is the Federal Ministry of Finance. Another authority at the federal level is the Federal Central Tax Office (Bundeszentralamt für Steuer), which predominantly deals with international tax matters. At state level each of the federal states (Bundesländer) has a State Ministry of Finance. In addition, several regional tax authorities exist at the state level (Oberste Finanzbehörden der Länder). At the local level the tax offices (Finanzämter) deal with the day to day tax matters of the taxpayers, in particular with processing and reviewing the tax returns, issuing tax assessment notices, collecting the taxes and handling appeals. The officials of the local tax office are usually accessible during office hours and often open to resolve minor issues in a rather informal and cooperative way. The local tax offices are also responsible for dealing with applications for binding tax rulings (Anträge auf verbindliche Auskünfte). If a tax matter is more complex, of particular importance due to the amounts involved or affects a multitude of taxpayers the case may be escalated to a higher authority, in exceptional cases even up to the Federal Ministry of Finance. In such a case the taxpayer should factor in several months until the matter is resolved.

Belgium Small Flag Belgium

The highest authority dealing with tax matters in Belgium is the Federal Ministry of Finance. The Central tax administration and all other tax authorities at the federal level are placed under Federal Ministry of Finance’s hierarchical authority. A similar structure is found in each Region, where the relevant Ministry of Finance has authority over the regional tax administration.

At the local level, tax offices deal with taxpayers’ day-to-day tax matters, in particular: processing and reviewing tax returns, issuing tax assessment notices, collecting taxes, and handling taxpayers’ claims (over tax disputes, see infra). The local tax office officials are usually available during office hours and are often open to resolving issues in a rather informal and cooperative way. If a tax matter is more complex, or particularly important due to the amounts involved, or affects a number of taxpayers, then it may be passed up to a higher authority such as the Central tax administration.

Italy Small Flag Italy

The highest authority dealing with tax matters in Italy is the Agenzia delle Entrate, which is an Agency directly dependant on the Ministry of Finance.

The Agenzia delle Entrate is organized at Central Level (in Rome) with offices dealings with the interpretation of the law and implementation of administrative regulations, as well as with certain ruling requests (international affairs and substantial investments). Local offices of the Agenzia delle Entrate are then organized in the Regions and in the Municipalities, on the basis of territoriality competence rules. Such offices have audit and assessment authority, receive payment of taxes and look after the regularity of tax payments. The local offices are also responsible for certain ruling requests, and for request of annulment of tax assessments, and settlement procedures.

Malaysia Small Flag Malaysia

The key tax regulatory is the Inland Revenue Board of Malaysian which oversees income tax, petroleum income tax, stamp duty and real property gains tax.

The Royal Malaysian Customs Department oversees goods and services tax, customs duty and excise duty.

By contacting the appropriate officer, it can take between 3 to 6 months to resolve a standard issue.

Ireland Small Flag Ireland

The Irish Revenue Commissioners is the body charged with the collection and administration of all taxes, duties and levies etc. Generally Irish Revenue take a firm but helpful approach and are commercial in their dealings with taxpayers. Their objective is the overall care and management of the tax system including the collection of the appropriate amount of tax based on the law in force.

Standard issues can be resolved reasonably quickly, i.e. within a couple of weeks by discussion with the relevant tax officer. Large taxpayers are administered in a specialist division (Large Cases Division). Where the issue involves a matter of policy or a particularly difficult technical point, a specialist division (Revenue Technical Services) would usually be consulted. Revenue technical services co-ordinate policy and technical positions of the Irish Revenue which are then implemented by the relevant case officers. A reference to revenue technical services can lengthen the process for resolving particular issues. The length of time required to resolve these depends upon the state of development of the policy or the particular technical question.

France Small Flag France

France does not have a regulatory authority dedicated to tax issues. The French system is based on return-filing, which may lead to audit, then, as the case may be, to reassessment by specialized bodies such as the "Directorate of National and International Audits" (Direction des Vérifications Nationales et Internationales) for the largest companies, with whom companies may discuss during the audit process.

However, the FTA may issue rulings in specific matters such as transfer pricing (Article L 80 B of the Tax Procedure Code). These rulings provide the taxpayer with protection and legal certainty as the tax authorities take an official stance on a specific question.

Furthermore, the FTA have recently (since 2013) experienced the “enhanced relationship” (relation de confiance) with volunteer leading groups and small and medium-sized enterprises (“SME”). Basically, the company commits to involve the FTA when a tax issue arises and the FTA commit to promptly deliver a ruling on the matter and validate over a certain tax period the tax treatment chosen by the company in accordance with the ruling. The objective is both to prevent tax audits as well as initiate a close relationship between the taxpaying companies and the FTA. This is still on an experimental basis and will need to be confirmed.

Australia Small Flag Australia

The key regulator for all federal taxation matters is the Australian Taxation Office (ATO), represented by the Commissioner. The ATO is responsible for the administration of (including others): income tax, goods and services tax, fringe benefits tax and luxury car tax. A separate body, Border Force (part of the Department of Immigration and Border Protection) is responsible for the administration of customs and excise matters.

In recent years, the ATO has indicated a desire to engage early with taxpayers, particularly those that they consider 'high risk' (eg high net worth individuals and large multinationals).

The ATO has specialist groups to assist in providing guidance to particular industry sectors to develop a greater understanding of the issues in those sectors. Further, the functions of audit, review and dispute resolution and legal interpretation are separated in order to assist in the resolution of disputes with taxpayers.

In many cases, minor issues can be resolved be direct engagement with the ATO and its representatives. This is done in a pragmatic fashion, although the ATO places a premium on treating all taxpayers the same and this can be an obstacle to the resolution of individual disputes as they need to be seen in the context of broader issues.

Specific issues of legal interpretation can be addressed through applying to the Commissioner of Taxation for a private ruling (a written statement about how the law applies in specific circumstances). Whilst simple private rulings can be issued within a matter of weeks, more complex issues usually take a number of months to resolve.

State-based taxes are administered by the relevant jurisdiction revenue authority (usually referred to as the Office of State Revenue). Generally, the various offices are open to engagement and discussion to work through any revenue issues that arise. It normally takes approximately a month to resolve 'standard issues'. These Offices of State Revenue also have different systems for public and private rulings to be issued to taxpayers on particular issues.

Switzerland Small Flag Switzerland

The relevant cantonal tax authorities as well as the Federal Tax Administration (“FTA”) are the regulatory authorities for Swiss direct taxes (income tax, capital tax, wealth tax). The FTA is also competent for the Swiss federal taxes, such as the value added tax (“VAT”), the withholding Tax and stamp-duties taxes. In particular, the Federal Customs Administration is in charge of the customs duties.

The length of time to resolve tax issues varies greatly and depends on the complexity of the issues. There is no standard amount of time that a tax dispute will take to resolve. Although the vast majority of tax disputes are settled prior to litigation, some disputes, especially those that go to litigation, can take years to resolve.

Updated: March 10, 2017