What risks are involved in designing corporate tax models?
December 18, 2023 | 50,00 EUR | answered by Mia Köhler
Dear Tax Advisor,
My name is Felix Zollmann and I am the managing director of a medium-sized GmbH. In the past, we have used various tax models for corporate tax to optimize our tax burden. However, I am increasingly unsure whether these models are still safe and legal.
I am concerned that the design of our tax models may pose tax risks that could lead to legal consequences. As the managing director, I am responsible for the company's tax affairs and want to ensure that we comply with all laws and regulations.
Therefore, I would like to ask for your expertise: What risks are involved in designing tax models for corporate tax? Are there specific pitfalls we should watch out for? What measures can we take to minimize potential risks and ensure that our tax models are legally sound?
I look forward to your assessment and recommendations to ensure that we are tax compliant as a company.
Thank you in advance.
Best regards,
Felix Zollmann
Dear Mr. Zollmann,
Thank you for your inquiry and your trust in my expertise as a tax consultant for corporate tax matters. It is understandable that as the managing director of a medium-sized GmbH, you are concerned about potential tax risks and want to ensure that your tax models are secure and legal.
When designing tax models for corporate tax, there are indeed some risks to watch out for. A common risk is that tax structures could be considered abusive tax avoidance. This means that certain models or constructs could be deemed not in line with the actual economic circumstances by tax authorities and therefore not recognized for tax purposes. This could lead to tax repayments, interest, and even penalties.
Another risk is the possibility that tax authorities may view tax structures as aggressive tax planning and take measures to combat them. In some cases, tax models could even be classified as tax evasion if they do not comply with regulations.
To minimize these risks and ensure that your tax models are legally sound, I recommend seeking professional advice. An experienced tax consultant can help you review and potentially adjust tax structures to minimize potential risks. It is important that tax structures correspond to economic circumstances and are transparently documented.
Additionally, you should conduct regular compliance checks to ensure that your tax models comply with legal requirements. Good documentation and traceability of tax decisions are also very important.
Overall, it is advisable to seek advice from a tax consultant early and regularly to identify and minimize potential risks. I am happy to provide you with comprehensive advice and support you in ensuring tax compliance.
Best regards,
Mia Köhler, Tax Consultant
