Tax advisor study has win-win potential, says Ernst & Young

Ernst & Young responded today to the release of the OECD Forum on Tax Administration's (FTA) study into the role of tax intermediaries.

Sean Kruger Director and Head of Tax for Ernst & Young, said today, “This study represents a constructive contribution to building stronger working relationship among revenue authorities, taxpayers and advisors. We particularly welcome that the study is positioned as part of revenue authorities’ ongoing efforts to improve mutual understandings and bases for cooperation.In that spirit, we support the ‘enhanced relationship’ framework that is proposed by the study and agree that ongoing work will be required in each jurisdiction to realise that vision.”

Kruger added, “Ernst & Young is fully committed to building and maintaining constructive relationships with regulators worldwide, including revenue authorities. We recognise that, for many affected by this report, there will still be areas of disagreement, but we believe that by maintaining an open and constructive dialogue we can build on the many positive aspects that are contained in the report to maximise the benefits of the ‘enhanced relationship’ objectives.

“This can also act as a route map for those countries outside of the OECD to adopt many of the recommendations that will improve relationships for all parties.”

Ernst & Young also issued additional comments on the study’s background and recommendations:
* At the outset, from a process standpoint, we appreciate the efforts of the study group to recognise different starting points amongst revenue authorities, and also to consult and enlist views from relevant groups of taxpayers and tax intermediaries. We also welcome various important background findings of the study, such as:
- The formation and maintenance of high quality tax policy and administration is fundamental to constructive and cooperative working relationships with tax advisers and taxpayers.
- The ‘basic relationship’ between tax authorities, advisors and taxpayers should continue to be developed, aside from the building of an enhanced relationship.
- Recognition that tax advisors generally play a positive role in helping businesses and individuals manage their tax affairs responsibly.
- Acknowledgement of the significant differences that exist amongst various groups of tax intermediaries.
- In the historic context of the ‘basic relationship’, a wide range of motivations and attributes underlie the behaviours and expectations of revenue authorities, taxpayers and tax intermediaries.

* Ernst & Young is supportive of many of the key findings and recommendations of the study, including:
- The acknowledgement by the study of the difficulties in defining ‘aggressive tax planning’ and instead focuses on areas of concern of revenue authorities relating to tax planning positions taken or disclosed.
- In proposing the ‘enhanced relationship’, the study sets forth key additional behaviours and attributes that should be expected from revenue authorities, taxpayers and tax intermediaries.
- The study shares various revenue authorities’ experiences with administration and ‘enhanced relationships’ but recommends that each jurisdiction undertake an approach that is appropriate under its circumstances, subject to general recommended guidelines.
- The study’s recommendation that dialogue and further work should be undertaken, including ongoing dialogue with the taxpayer groups, tax advisers and other tax intermediaries identified in the study.
Ernst & Young will continue to support the ongoing efforts of the OECD FTA and the various groups of taxpayers and intermediaries.