There are several pitfalls that a company should follow when it has a voluntary disclosure agreement. The subject must come forward and request the VDA from a Member State before receiving requests, communications or audit notices from the State concerned. Some states limit these requests, communications or audit communications to the specific nature of the disclosed tax, while others extend it to all state-administered taxes. This is the most common misunderstanding about voluntary disclosure agreements. The key is that it is a “voluntary” confession… If the state contacts you on its own about certain tax breaches, the state does not see things as you voluntarily register. I have a clue. It is essential to preserve the taxpayer`s anonymity until an agreement is reached. Therefore, the tax advisor should not at any time inform the tax officer of the taxpayer`s identity until an acceptable agreement has been fully negotiated and accepted by the taxpayer. Trial begins. The taxpayer (or his or her tax advisor) should first become familiar with voluntary advertising rules, administrative communications and state advice. The taxpayer or advisor should then contact the official who manages the program for each tax issue. They are not included in a voluntary disclosure program without having to make an effort.
However, the more external resources you rely on, the less you have to do yourself. It is in the company`s interest to be proactive and use a Voluntary Disclosure Agreement (VDA) to resolve any crime. A VDA is an effective mechanism for a company to explain its previous public or local tax obligations. This will reduce the risk of future audit evaluations, reduce business costs and eliminate potential liabilities from your financial statements. Confidentiality rules are dealt with in voluntary disclosure procedures by several states, paragraphs 6 and 7. The Commission treats the identity of the applicant confidentially during the voluntary advertising procedure. The Commission will not disclose the identity of an applicant to a Member State until the applicant has entered into a VDA with that State. Pending the signing of such a contract, an applicant is known to that state only by his voluntary disclosure, which was granted by NNP staff.
The Commission will not disclose the VDA or its conditions to another state. Before executing a VDA, the applicant is not required to disclose information that would reveal his or her identity. Secure emails are available to send confidential taxpayers. In addition to VDAs, a company can benefit from other tax reduction strategies. Depending on fiscal sovereignty and the specific facts and circumstances of a taxpayer, states may propose amnesty programs or negotiated conclusion agreements.