The increasing uncertainty faced by taxpayers is an inherent element of the constant changes made by legislators. Therefore, it is crucial for taxpayers to effectively manage this tax risk. Compliance procedures are a key element in this regard.
Tax compliance, in its literal sense, refers to adherence to tax law – it is a tax advisory procedure in the field of tax reporting and settlement, aimed at minimizing risk. Its scope encompasses not only the timely filing of tax returns and tax payments, but also the analysis of compliance with other obligations. It will cover all taxes related to business activity, as well as public law obligations.
The tax compliance procedure, as a system of compliance in the tax area, is preventative in nature. It enables continuous monitoring and control of the current status, ensuring taxpayers can react quickly and prevent any irregularities. This primarily results in avoiding potential fines and sanctions, but also reduces the possibility of future risk. It is also crucial to enable taxpayers or entrepreneurs to adapt to changing regulations and tax realities, which impacts both their effectiveness and the reputation of their company, as well as the ability to legally optimize tax and efficiently achieve their goals through the use of appropriate strategies.
The purpose and capabilities of the system may vary depending on the type of transaction or business activity being conducted. However, prior to initiating the procedure, it is crucial to determine the requirements. Therefore, tax compliance incorporates elements of auditing, tax consulting, and accounting, resulting in a highly effective procedure.
The lack of a tax compliance management system may result in the need to pay overdue taxes along with interest, surcharges, extended confiscation and fiscal criminal liability.
In the next articles of the series, we will present the topic of the plastic tax, changes regarding the implementation of the global minimum tax at the rate of 15% (Pillar Two), and the withholding tax.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of July 4, 2023
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