Why a TAX-CMS (fiscal risk control system)

The three most common reasons for setting up a fiscal risk control system are:

• it follows from the legality control obligation of the business supervisory bodies that an effective tax compliance management system must be in place.
• a lack of a tax risk control system usually leads to a liability exclusion of a D&O insurance.
• by decree of the Federal Minister of Finance in 2016, the rules on retrospective changes to tax returns under § 153 AO were tightened. An internal control system is expressly mentioned here as a possible mitigating factor.

For many risks, the actual amounts of damage can and must be determined. In point 3.b) a correct calculation per risk is made.

Already existing risk minimization concepts are documented and checked in point 3.c).

• Basic Principles (e.g. tax guidelines)
• Measures (e.g. work instructions and special documents)
• Controls (e.g. 4-eye principle etc.)

The aim of a TAX-CMS project is to minimize the probability of risks occurring. For this purpose, necessary minimization activities are designed depending on the risk level (3.d).