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?