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Who are tax intermediaries?

Tax advisers
Accountants
Lawyers
Financial institutions

Why are they considered as tax intermediaries?


Tax Compliance: tripartite relationship between Tax
authorities, Taxpayers and tax professionals.

Taxpayers do not necessarily understand the whole tax


rules

Tax authorities (particularly tax inspectors) do not have


necessarily the right interpretation of some tax rules.

The role of Tax professionals: helping taxpayers


understand and comply with their tax obligations in an
increasingly complex domestic and international tax
regulation.

The scope of the tax professionals role depends on


whether the taxpayers finance team includes tax
specialists or not.

Would compliance with tax laws improve if tax


intermediaries did not exist?

Tax due diligence


Help investors understanding the business of the
target
Determine the major tax risks to which the target is
exposed
Provide the main features of the tax regime applicable
to the target
Provide the main available tax incentives
Determine any pending tax litigations with tax
authorities

The pricing level of the transaction will take into


consideration:
Tax liabilities and risks
Tax incentives
Even the vendor may appoint a professional to do the
same work (Vendor due diligence).
Where reports prepared by both professionals are not
consistent, meetings will be held to reconcile their
positions.

Tax compliance:
Bookkeeping
Preparation and submission of tax returns
Tax assistance: reconciliation between accounting
figures and declared taxes
Certifying the tax return before submission
Tax audit
Assessment of an entitys tax exposure
Scope of work: more detailed than a tax due
diligence (examination of invoices, contracts and
other supporting documents)

Tax advisory
Answering taxpayers queries regarding tough
issues
When answering a taxpayers queries, Tax
professionals refer to the regulation in force and
guidelines issued by tax authorities (public rulings,
private rulings). Adjustments introduced during
previous tax controls are as well taken into
consideration.

Complying with professional standards and legal


obligations is a must for professionals.

Accounting standards (IFRS/ Local GAAP)


These standards prescribe the level of details to be
disclosed within financial statements.

Audit standards (IFACs standards)


These standards prescribe the audit approach as
well as the auditors diligences.

The role of the auditor is to conclude whether or not


financial statements are prepared, in all material
respects, in accordance with the applicable financial
reporting framework.

Tax regulations
Some countries oblige taxpayers to:
- have tax returns certified by tax professionals
(who engage their responsibility in case of fraud)
- disclose the identity of their tax adviser