Implementation made simple – the example of HITGuard

In the world of tax, compliance management systems (tax CMS) continue to be a hotly debated topic. The discussion gained new momentum from the current test phase (Section 38 of Article 97 of the Introductory Act to the Fiscal Code [EGAO]) for DAC7. Tax authorities may now promise specific simplifications for future tax audits if the current audit has confirmed the effectiveness of the existing tax CMS. 

Our neighbours in Austria are already a step ahead with these issues and are closely following the cooperative approach to tax auditing. With our clients in Germany, too, we are increasingly sensing the desire for tax audits to be more efficient. 

Many companies, particularly those in the mid-market, are still using Excel as the main tool for their tax CMS. But it is doubtful that this is the best way. We consider a better alternative to be professional governance, risk and compliance tools, which are enjoying more and more popularity in business practice. They make the tax compliance officer’s job considerably easier and thereby contribute to an effective tax CMS.

Tax CMS should be thought of as a digitalisation project

In our opinion, implementing a tax CMS should also be considered as a digitalisation project. In light of this, we present the HITGuard tool, developed by our partners TogetherSecure GmbH. 

• In our experience, a risk control matrix (RCM) that only exists in an Excel file increases the likelihood of the tax CMS not being sufficiently acted out or kept up-to-date.
  
  
• HITGuard provides support with updating risk assessments by means of reminders and documentation of changes, including reasons (an audit trail).
  
  
• All the relevant information is stored in one place. There are no more questions about which Excel file is current.
  
  
• A catalogue of risk-mitigating measures is created. The risk control matrices for the various types of tax draw on the same catalogue of measures. This improves consistency.
  
  
• They provide significant support for the tax compliance officer in carrying out his or her duties. The audit plan can be worked through within a tool and based on a workflow (no more sending emails back and forth). 

You have questions on your tax CMS or using HITGuard at your company? If you would like to contact me, I would take pleasure in talking about it with you in depth.