The new introduced cooperation program creates a vision of agreements and mutual trust between entrepreneur and tax administration. The agreement has to bring array profits whose entrepreneur may source when he decide to conclude it. However it mustn’t ignored disadvantages in which get into taxpayer. It is worth to paying attention to introducing of these program, which may be also tool to minimalize effects of excessive tax optimization or other form tax avoidance.

What are the benefits for the entrepreneur?

As a Ministry of Finance presented, the primary benefit offered by the program is the individualized support and approach to taxpayer activities, which are immediately adjusting to the form of his business activity. What is importance, thanks to the functionality of the program, it is impossible to minimize the costs that are generated in the situation multiannual tax control requiring the involvement of an additional quality of specialist in connection with the conduct of proceedings. It’s results from including of the company’s stabilized internal management, which will results from predefined supervisory framework. The aim is to ensure that tax issues are controlled and that obligations are adequately fulfilled.

The transparency of the entrepreneur to tax administration is intended to guarantee the predictability of the tax amount in relation to public costs. Tax authorities are providing ensure that they will be systematically provide answers and adequately consult questionable issue for the entrepreneur.

In addition, the tax authorities will adjust the form and frequency of his controls after prior consideration of the entrepreneur’s procedures. Thus, the supervisory frequency of tax regulations will depend on the internal rules of the entrepreneur regulations, which will be monitored in respect of regularity with tax regulations. It should emphasized that, the cooperation program provides that the arrangements prior agreed between the entrepreneur and the tax authority.

Abovementioned, cooperation program may be a tool that will normalize foregoing relations with tax authorities and the taxpayer using these program will be identified as a reliable entrepreneur who provides service with appropriate quality.

Disadvantage of cooperation program

Multiply provides and benefits results from program can certainly encourage for entrepreneurs to make an agreement with tax authority. However, the significant issue of the program shouldn’t be except some disadvantages of program. It should be emphasized that the implementation of the agreement is linked to a number of obligations on the part of the entrepreneur, who, without carrying out certain activity, cannot make use of the above advantages. Moreover, the controversially wide range of information that entrepreneurs will be obligated to provide to The Head of the National Tax Administration raises doubts.

Entrepreneurs will be obligated to provide an adequate and effective mechanism for managing tax liability and risk. Therefore, two audits are foreseen, which the taxpayer should successfully pass. The first is a preliminary audit, on the basis of which, before make an the cooperation agreement, the taxpayer should provide the Head of the National Tax Administration with an adequate verification of the tax settlements, as well as the possibility to verify his proper supervisory process in the company regarding tax functions. Such action requires a complete verification of the correct processing of the tax obligations by the entrepreneurs during the 2 tax years preceding the year in which the taxpayer requested the signature of the cooperation agreement and the period from the beginning of the tax year in which the taxpayer made the application until the date of completion of the audit. Consequently, internal tax processes are monitored that ensure that the entrepreneur manages tax risk accordingly and has the appropriate tools to a properly processing their tax obligations. The second audit is to be a monitoring control which will be conduct on a continuous way after the conclusions and is to control the agreement in an effective way.

Furthermore, the entrepreneur without prior appeal, will be obliged to make available information to The Head of National Tax Administration about any issue which might affect to any tax benefit. Such strict, conditions can create anxiety and doubts for entrepreneur.

Note that to the level of interference to tax administration in the business activities. Before concluding the cooperation agreement is necessary to verify the current system and process in the company. The audit may result in an opinion or recommendations which should be removed by the taxpayer to make use the cooperation program. This scope gives the tax authority privilege to insight into company history, in case of negative result, the cooperation agreement cannot be concluded. Therefore, deciding on a cooperation program, it is important to whether the processes of company mechanisms for the supervision and the correctness of the tax liability are sufficiently effective to give a positive opinion.

Moreover, the taxpayer under the agreement undertakes with a strict framework for internal tax supervision. It can be conclude, that the entrepreneur to some extent becomes and entity assigned to the tax administration, so that any activity of the entrepreneur must be rationally considered. In conclusion, it must be taken into account the scale of monitoring that companies decide who want to make use from the cooperation program. It should be considered whether it is proportional to the undertaken cooperation to get wide sphere of information about the activities and whether the benefits are actually profitable.