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NEWS FairTax researchers Dennis de Widt and Lynne Oats, both from the University of Exeter, recently got the article “Risk Assessment in a Co-operative Compliance Context: A Dutch–UK Comparison” published in the British Tax Review, Issue 2, 2017.
Growing pressures on resources means that tax administrations rely increasingly upon risk assessment techniques in order to enhance their regulatory efficiency. Risk-based regulation plays an important role in co-operative compliance based relationships between tax authorities and large corporate taxpayers in many countries. In return for a high level of disclosure by corporate taxpayers, tax authorities commit to a “light touch” approach in monitoring companies deemed to be low risk, while intensifying supervision of companies with a high risk profile.
The article “Risk Assessment in a Co-operative Compliance Context: A Dutch–UK Comparison” compares risk assessment techniques applied to large corporate taxpayers in the UK and the Netherlands. While both are regarded as co-operative compliance pioneers, the Dutch and UK tax authorities differ significantly in the way in which risk assessment is operationalised, whilst demonstrating similar challenges in realising administrative efficiency gains from implementing risk-based regulation. It is concluded that the benefits of risk-based regulation in a co-operative compliance framework may be easier to realise for corporate tax payers than for tax administrations. Credibility concerns, for the latter in particular, would need to be overcome in order to advance co-operative compliance.
Editor: Elin Andersson