In the research activity carried out by the Tax and Competitiveness Foundation (Fundación Impuestos y Competitividad), it is usual for the importance of the rules comprising the tax system as well as their actual application to be emphasized.
With regard to the latter, where the conduct of taxpayers and the Tax Administration acquires special relevance – both subjects involved in the application of the Tax System – the invocation of “governance” or “good governance” has emerged with growing force.
The aim of this new work is to analyse, in detail, tax governance and its different implications, seeking certain precision and clarity of thought in an area which, in principle, is ambiguous, where legal requirements combine with considerations of social responsibility and the ethics and morals of taxpayers, in particular, companies.
For this study, the work has been structured into a first part consisting of prior considerations on the history, conceptualization and legal framework of governance; a second part which covers different areas of governance such as:
- procedures for drawing up the tax rules and the impact thereof on taxpayer compliance;
- compliance in terms of strict legality, the role of interpretation of the tax rule, the set of anti-abuse clauses;
- transparency as a requirement of good governance;
- the Public Administration’s response;
- the company’s response, processes relating to compliance, management and control of tax risks, tax compliance.
And lastly, a third part, in which “collaborative relationship”- also invoked as “collaborative compliance”- is treated separately with a detailed analysis of its international development and in Spain, and an assessment of its advantages and requirements or disadvantages, in relation to both the company and the Tax Administration.
The work closes with a chapter containing conclusions, which, besides adding the final evaluations of each chapter, sets out the general criteria which must be considered.
The obliged search for balance must certainly be highlighted – hence, its inclusion in the title of the work: the new requirements for tax compliance that governance entails and the objectives of transparency and good faith in relationships between the Tax Administration and the company that is sought by the same, can only be fully feasible if they are established in a balanced application of the new principles and guidelines.
This balance, regarding the application of the rules of good governance to the Tax Administration and the taxpayer, and also moderation when analysing the different aspects of governance, has sought to be the hallmark of this project. The work has been drafted by the University and professionals from the firms comprising the Board of Trustees of the Foundation, with the participation of a public official with long-standing experience and sound knowledge of the facts.
Furthermore, the work aspires to reflect the viewpoints of the Tax Administration and companies, which have been actively involved in the roundtable discussions held to conduct the research.
We cannot end this review without thanking the business groups BBVA, Banco Santander, Iberdrola, Repsol and Telefónica for their financial collaboration arranged through collaboration agreements.
The title of the book that contains all this work is “Tax governance: a balanced approach”, and authorship of the same is attributed to KPMG Abogados as the firm charged with co-ordinating the project.