19 November, 2021
Revenue’s Large Corporates Division (LCD) relaunched the CCF programme in 2017. They wanted to foster a relationship with large companies based on trust and co-operation.
29% of eligible corporate groups have opted to join the Co-Operative Compliance Framework (CCF), with representation from most industry sectors.
Revenue recently carried out a review of CCF to assess if it is meeting its objectives and to identify areas which would improve the effectiveness of the framework. This involved a survey of CCF participants.
Based on our experience of supporting clients through CCF, together with the findings of Revenue’s survey, we now have a real insight into what CCF entails for participants.
(i) Risk review meetings
All participants have an annual Risk Review Meeting with their Revenue case manager in order to confirm that the Group continues to meet its CCF obligations and to maintain / develop relationships with Revenue.
The purpose of these meetings is to provide Revenue with an update on significant developments in the business, particularly those that may impact the company’s tax position. General agenda items typically include business performance; M&A activity; forecasted tax payments; Tax Control Framework.
All participants in Revenue’s CCF survey agreed that the Risk Review Meetings result in Revenue having a better understanding of their business and help foster a relationship of trust.
(ii) Self reviews
One of the main benefits of CCF participation is a general safeguard from Revenue audits.
However, in return, participants are expected to carry out regular self-reviews on key tax risks. Revenue may also identify in the Risk Review Meeting specific risks that they would like the company to review.
On completion of the self-review, companies should prepare a summary report outlining the scope of the review, the testing performed and the findings of same. Where control weaknesses are identified, the company should take remedial action. Any tax shortfalls identified should be quantified and regularised through the qualifying disclosure mechanism. Typical areas selected for self-review include:
It is not unusual for trends to emerge in the areas identified by Revenue for self-review year-on-year. One such current trend is the area of contractors.
Since the inception of CCF, LCD has generated more tax yield from CCF self-reviews than from audits. This is a clear indication that companies have bought into the self-review process and the spirit of CCF.
(iii) Tax Control Framework
All companies in CCF are required to have a Tax Control Framework (TCF) in place (as confirmed by them on their CCF application form).
The TCF is an agenda item in every CCF Risk Review Meeting. Revenue’s expectations on the components of a TCF continue to evolve and they are now probing at process specific tax controls and seeking evidence on the operation of same.
In December 2020, Revenue released new guidance which sets out its more advanced expectations as regards what a TCF should consist of. In particular, in the context of TCF, Revenue would expect companies to:
Benefits from engaging in the CCF process accrue to both companies and Revenue. The benefits for companies include:
On foot of the survey findings, we understand that Revenue is giving consideration to some refinements to the regime which would further enhance the benefits of participation.
If you wish to join CCF, an application form must be completed in which you must confirm that the Group satisfies the relevant entry criteria for CCF. Formal entry to CCF will only be granted where Revenue is satisfied that these conditions have been met.
We set out below the key areas and actions that need to be considered, either before submission of the application or in advance of the first CCF risk review meeting:
Whether you are already participating in CCF or are considering joining, PwC’s specialist Tax Risk & Revenue Interventions Team can assist you.
Our team, which includes a number of ex-Revenue officials, has extensive experience in supporting companies through all aspects of the CCF process and managing tax risk.
We can assist you in:
We are ready to help you navigate the CCF journey, ensuring that the monetary, reputational, business risks that you face are carefully managed. Contact us today.