Tax risk and controversy

In a challenging Revenue audit environment, it is important that companies navigate the tax risk and controversy landscape

The tax risk and controversy landscape is changing

Over recent years, Revenue has increased resources devoted to audits and enhanced its risk profiling capabilities. It is also adopting a more data-driven approach to identify non-compliance.

As a result, Revenue interventions are becoming more onerous, data requests more granular and disputes more frequent. Serious sanctions are possible if Revenue identifies tax liabilities during the intervention.

Our audit, appeals and tax controls services

Our Tax risk and controversy team can help you manage your interactions with Revenue. We can work with you to mitigate the monetary and reputational risks that you face.

Revenue audits

Revenue audits and other compliance interventions can seriously disrupt your business. Today, they're more complex than ever. Revenue uses e-audit technology to interrogate taxpayers' electronic records. This makes it easier for them to detect non-compliance.

The risks associated with Revenue audits have never been higher. They include:

  • Publication in the tax defaulters list
  • Payment of interest
  • Tax-geared penalties
  • Recovery of the underpaid tax

Few organisations have the knowledge, experience or resources internally to prepare for a Revenue audit. Our Tax Risk and Controversy team, that includes former Revenue auditors, can help you navigate through the audit process. We can:

  • Carry out pre-audit reviews to identify tax liabilities that need to be disclosed to Revenue
  • Prepare a Qualifying Disclosure and quantify the tax, interest and penalties due
  • Negotiate with Revenue to minimise the monetary settlement and risk of publication
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Tax Control Framework and health checks

In a challenging audit environment, it is important that companies take a proactive approach to managing their tax risk. The monetary and reputational risks associated with non-compliance can be severe.

Key to managing this risk is the establishment of a Tax Control Framework (TCF). The TCF comprises structures and process controls to ensure that a company's tax filings are accurate. When developing a TCF, companies need to consider issues including tax governance, the effectiveness of the tax function, and what operational controls are in place to manage risks across various tax heads.

The existence of a TCF is looked upon favourably by Revenue. It also helps companies satisfy their obligations under the Directors' Compliance Statement.

We can help you establish your TCF and prepare specific controls to manage your key tax risks. We can also carry out health-checks to assess the effectiveness of your existing controls and identify any tax exposures.

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Cooperative Compliance Framework

The Cooperative Compliance Framework (CCF) is a programme designed to facilitate a more open relationship between Revenue and large corporates. It aims to achieve a high level of voluntary tax compliance. CCF brings with it both benefits and obligations for participants.

If you are considering joining CCF, we can work with you to evaluate the merits of participation and support you through the application process.

If you are already participating in CCF, we can support you in meeting your ongoing CCF obligations: We can:

  • Help you prepare for the annual Risk Review Meeting
  • Work with you to develop a Tax Control Framework
  • Carry out self-reviews and prepare self-review reports for submission to Revenue
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Tax appeals

We can assist you through the entire tax appeals process. From lodging an appeal to preparing for a hearing before the Tax Appeals Commission (TAC) and the higher courts, we are here to help. We work with you and counsel to clarify the tax issue in dispute and the process itself.

The tax appeals process has undergone a recent overhaul. It followed the introduction of new legislation, and the recruitment of more Appeals Commissioners and a new Chairperson of the TAC.

The TAC committed to increase the efficiency of the appeals process and to clear the current backlog of tax appeal cases. This should help to reduce the cost and uncertainty associated with entering the process. But it brings with it the need to be prepared to meet the increased expectations of the Commission. We work with you to manage the process in a way that suits your needs, causing the least disruption to your business.

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The aim in a dispute is to reach a resolution with the relevant tax authority. You want to avoid the risks, expense and publicity of full-blown litigation. A large part of our work is in settling disputes with Revenue before they reach the litigation stage.

We can work with you to resolve tax disputes and to seek a settlement of a tax dispute with Revenue. This can provide certainty, speed up the process, and avoid costly litigation. It allows you to focus on your business and close out your tax positions.

We support you through this process. We provide our experience of negotiations with Revenue to advise on potential outcomes.

We take a holistic approach in addressing tax disputes. We want to ensure the best possible solution for you, and to mitigate interest, potential penalties and the risk of publication.

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Transfer pricing dispute resolution

There has been an increase in TP disputes domestically and internationally. As a result, Revenue has expanded its transfer pricing (TP) audit and Competent Authority resources.

We help you to understand your options, develop a strategy, and guide you through the steps to resolve TP disputes. We do this via:

Mutual Agreement Procedure (MAP)

A process through which taxpayers can request assistance from Competent Authorities to resolve international tax disputes where double taxation arises.

Correlative Adjustment

An application for an adjustment to an Irish taxpayer's profits under the terms of a Double Tax Treaty where a taxpayer has unilaterally agreed and paid additional foreign tax resulting from the adjustment.

Advanced Pricing Agreement (APA)

An agreement entered into between tax authorities and taxpayers on the future application of TP policies on a specific transaction to prevent disputes.

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Tax transparency

Taxes are an important source of revenue for governments, and play an integral role in developing fiscal policy and attaining macroeconomic stability. However, the sheer scale and complexity of an organisation's footprint, across multiple jurisdictions with differing regulations, makes tax a difficult area to navigate, let alone communicate simply to interested parties.

As environmental, social and governance (ESG) criteria continue to come to the fore, tax is becoming a powerful indicator of a company’s societal impact. To ascertain that impact, stakeholders now demand a greater level of tax transparency.

Tax transparency is not just about providing additional detail on tax payments. It requires a broader view of tax strategy, tax risk management and the wider impact of companies’ tax contributions. We can help your company define its optimal tax transparency strategy.

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Contact us

Aidan Lucey

Partner, PwC Ireland (Republic of)

Danielle Cunniffe

Partner, PwC Ireland (Republic of)

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