Review your enterprise's tax governance practices and test if you have good policies, procedures and controls in place.
Our guidelines will help you to understand where your enterprise is in the journey to having a good tax control framework (TCF). You can then decide if your tax risk management and TCF meet our expectations.
The following 2 steps are a starting point.
- Undertake an initial assessment, often referred to as a gap analysis assessment. The resources below will help you with your self-assessment.
- After the gap analysis, actively progress through the maturity model and process journey.
Inland Revenue tax governance maturity model
We have developed a simple model to show the different levels of tax governance maturity. Enterprises can use the model to assess their current level and work out how to progress through the stages of maturity.
You can find the maturity model on page 19 of the Multinational enterprises compliance focus 2024 report. You can find the report at the end of this page.
We expect most enterprises to be near the established level. Significant or multinational enterprises should already be at the established level or higher. New significant enterprises that have experienced recent growth should aim to move from emerging/processing to established/aspirational.
Process journey
Review where you are in your tax governance journey.
Evaluate
- Understand your current state.
- Set your tax strategy.
- Update your policies and procedures.
Establish
- A tax strategy is in place.
- Tax risks are being managed.
- The tax function is fit for the enterprise.
Enhance
- The tax control framework is being tested and updated.
- There are regular tax health checks and rolling testing of processes and procedures.
You can use the 10 questions in the tax governance checklist as a starting point. The checklist is in our initial guidance.
Initial guidance on tax control frameworks
Aim for the enhance level
As an enterprise moves from evaluate to enhance, its behaviour moves from reactive to proactive/predictive.
Examples of proactive/predictive behaviour include:
- implementing systems to identify, assess and mitigate tax risks proactively
- using advanced technology to monitor tax data, automate compliance processes and flag potential risks
- regularly ensuring processes are up to date and fit for purpose, including testing regularly, reviewing the results and implementing any changes.