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					                Organisation for Economic Co-operation and Development




Auditing Multinational Enterprises



                    8. Information




                                  Centre for Tax Policy and Administration
               Information is vital ..


.. If we are to be able to properly conduct an audit.


•   What powers do tax authorities have to obtain
    relevant information?
•    What are the main routes to obtaining
    information?
•   What are your practical experiences of
    obtaining information in order to conduct an
    audit?
      Tax authority Information Powers

 Documentation - is the taxpayer required to
  keep contemporaneous documentation?

 Filing requirements - is the taxpayer required to
  provide information with the tax return.

 Information powers –   what powers does the tax
  auditor have to require the taxpayer to provide
  information during an audit.
              Information powers

 Do information powers allow access to notes of
  meetings, internal correspondence, e-mail
  exchanges?

 Can the auditor visit premises, interview
  business personnel?

 Can information held by third parties be
  obtained?
             Routes to information

• Taxpayer held information and documentation
(e.g. legal agreements, letters, e-mails)
• Interviews with business personnel
• Third party information i.e. information held by
  banks
• Publicly available information e.g. trade journals,
  internet (including company internet site)
• Other government agencies
• Exchange of information under a tax treaty
        Information requests - balance


Need a balance between:
 The auditor’s need for information in order to
  properly conduct an audit, and

 The compliance cost to the taxpayer in
  gathering, maintaining and providing the
  information.
        Information requests - focus

Auditor needs to:
 Avoid asking for irrelevant or useless
  information

 Avoid asking for more information than can
  he/she can cope with

 Be focused – know what it is that is being
  tested, the criteria by which it is to be tested and
  the information needed in order to test.
               Focus - example


We may want to test whether GM IP Holdings is
  resident for tax purposes in country A.
 What are the criteria used to test this?
 What information do we need in order to test
  this?
             Country experiences


 What information powers does your country
  have?

 What are the practical issues you face in
  obtaining the information you need to conduct
  an audit?

 What steps can you take to require a taxpayer
  to provide you with the information you need?

				
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