For good tax governance, your tax control framework (TCF) must have 3 core elements - evidence of existence, design effectiveness and operational effectiveness.
Evidence of existence
This means there is evidence that a TCF exists, and there are processes and procedures in the framework. This will confirm that there is a system or way of doing things that results in consistent outcomes.
Design effectiveness
The TCF and its processes have been designed effectively. There is evidence that there is a system designed to ensure the enterprise pays the correct amount of tax. The TCF identifies and mitigates tax risks for the business.
The TCF must be documented. For example, there are documented tax processes, policies and procedures, and regular reviews and walkthroughs to ensure they are up to date.
Operational effectiveness
The TCF and its processes are operating effectively. In practice, they ensure that the enterprise meets its compliance obligations, identifies tax risks and mitigates them.
The framework needs to be tested regularly to ensure that its processes and procedures remain fit for purpose and up to date.