Co-operative Compliance: A Framework

From Enhanced Relationship to Co-operative Compliance

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This report examines the relationship between large business taxpayers and revenue bodies, five years on from the publication of the FTA’s Study into the Role of Tax Intermediaries. The study recommended that revenue bodies develop a relationship based on trust and co-operation. The report is based on a detailed examination of the practical experiences of countries that have established this type of relationship.

The report finds that the pillars of an improved relationship highlighted in the Study remain valid. However, it identifies some additional features that are equally important: the part played by the tax control framework used by a large business in providing an objective basis for trust is emphasised. It also suggests that “co-operative compliance” is a better description of the recommended approach than the original “enhanced relationship” label.


The report addresses some questions that have been raised about the compatibility of the new approach with certain legal principles and discusses the internal governance of these programmes within revenue bodies. The importance of making a sound business case for the approach and how to measure the results of co-operative compliance programmes is addressed. The report concludes with some thoughts about the future direction of the co-operative compliance concept.

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Internal governance of co-operative compliance programmes within revenue bodies

Since the publication of the 2008 Study some commentators have questioned whether relationships based on the principles of co-operative compliance could affect the impartiality of the tax officials involved. Internal Governance arrangements are key for all revenue bodies that have introduced a Co-operative Compliance Programme. Within these programmes large taxpayers and revenue bodies base their relationship on mutual transparency, understanding and justified trust. This means that tax officials are expected to combine two roles: they are expected to maintain an open relationship with the taxpayer but they are also required to remain impartial and professional and to retain a critical attitude towards the taxpayer and the information and tax risks it discloses. The maintenance of taxpayer confidentiality is an important aspect of building trust and helps taxpayers share information more freely with the revenue body. At the same time it can be seen as an obstacle to the process of providing assurance to external stakeholders about the impartiality of the revenue body. Failure to maintain a professional critical attitude could have damaging effect on overall confidence in revenue bodies.


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