Digital solutions for safe compliance in businesses

Compliance requirements and management of control measures minimising risk

Compliance requirements and the management of control measures to mitigate compliance risks are a cause for concern for most companies and might cause some headache with concerned parties. 

But it doesn’t have to be. And it doesn't always have to be the costly end-to-end solution. More competitively priced, small but highly effective solutions offer ways of implementing compliance projects in a secure process without having to compromise on customised flexibility.

Our practical experience has shown us how important it is to implement pragmatic solutions hand in hand with the companies and as a partner more than just an external advisor. With this in mind, we have developed interdisciplinary search options that effectively and reliably help companies to efficiently and easily mitigate the risk potential of certain issues.

Why this makes sense? Because every company has risk issues. These include, for example: 

• bogus self-employment,
• foreign assignments, data protection,
• incentives,
• company events, etc. 

These issues have far-reaching financial consequences, for example for social security contributions, payroll tax and VAT. At the same time, however, personal fines for the management if duties and taxes are not paid can hit those involved hard when they occur. 

Many companies are therefore facing the challenge of managing tax risks without introducing complex and expensive solutions. Digital queries and customised forms help to efficiently and effectively meet tax compliance requirements. With these solutions, companies can:

• standardise tax processes and reduce manual errors.
• conduct risk assessments early to avoid regulatory fines and penalties.
• automate documentation requirements to meet regulatory demands.

Our practical experience shows that companies can significantly optimise their tax and compliance processes with user-friendly customised digital solutions.

A key requirement is to create efficient, easy-to-understand and, above all, practical solutions for employees in all areas of the company (finance, marketing, accounting, purchasing, sales, etc.). 

These solutions are designed to quickly classify certain predefined risks. After a quick classification and an initial risk indication, the company can instantly decide whether 

• certain matters can be implemented without further action,
• they only require the involvement of certain bodies, or
• a case-by-case assessment is necessary as part of a special review.

Risk issues and user-friendly solutions via tool-based queries

Tax risks in businesses:

• Bogus self-employment: risks associated with the new AI-supported audits by the German Pension Insurance (DRV).
• Incentives & company events: tax treatment and correct allocation of remuneration.
• International assignments & compliance: risk analysis and optimisation of duties.

Digital TCF solutions offer a structured approach to tackling these challenges. Businesses benefit from:

• automated questionnaires that identify tax risks at an early stage.
• legally secure documentation to facilitate audits by tax authorities.
• faster classification of tax cases to make compliance processes more efficient.

Example bogus self-employment:

Since January 2025, the German Pension Insurance (“DRV”) has been using artificial intelligence for risk-based employer audits (“KIRA”). This new technical support focuses on uncovering bogus self-employment and disguised posting of workers on a temporary basis. The DRV expects that the AI application will allow for more efficient and more accurate identification of bogus self-employment and disguised posting of workers on a temporary basis, thus significantly increasing the detection rate. This means that this audit area is increasingly coming under scrutiny from the DRV. 

A status check of employees already employed by the company itself can be carried out efficiently and reliably by the company using the tool-based query, incorporating the necessary legal parameters. The same applies to the onboarding of new freelancers, who must always be checked for integration into the company. A company's own employees cannot be expected to have in-depth knowledge of social security law. But completing a questionnaire with carefully considered answers can be expected – especially if it is customised and user-friendly for the company. If there is any doubt, the case is passed to the relevant department or consultant for review at the end of the classification process. However, experience shows that the number of cases requiring extensive review is significantly reduced.

Example incentives:

When it comes to incentives, it is often difficult for a company to properly record certain accounts, determine the correct tax treatment and identify the right VAT consequences without a process. Experience shows that this subject remains one of the most frequently audited areas in tax audits – with a positive outcome for the auditorfor whom this  often represents a quick additional result similar to that for hidden profit distributions.

Here, too, each department (purchasing, marketing, HR, etc.) can ensure that the correct tax treatment is applied within the group by entering incentives in forms when placing orders, e.g. for incentives or for organising company events. And all this can be done without a great deal of additional time and effort.

Digital solutions as the key to tax compliance

A modern tax control framework (TCF) offers:

• automated risk assessments for tax and regulatory issues.
• digital audit trails that simplify audit processes and satisfy documentation requirements.
• efficient interfaces to finance and accounting systems to optimise processes.

The combination of technology and tax expertise ensures that companies can identify tax risks at an early stage and manage them efficiently.

Auditability based on documented processes

Digital solutions provide auditable documentation of tax processes:

• automated queries minimise sources of error and ensure compliance;
• legally secure storage of decision-making processes reduces liability risks;
• compliance with regulatory requirements through clearly defined workflows.

With a consistent documentation strategy, companies can not only optimise their tax processes but also protect themselves from audits and potential sanctions.

Practical tip for minimising liability with a TCF

A tax control framework is essential for companies to identify tax risks at an early stage and minimise liability risks. Whether to simplify processes in the company, to meet compliance requirements or specifically as part of a TCF project: from awareness of potential risks to documenting the facts and the decision-making process, while taking into account various risk ranges, companies can only benefit from digital processes that are tailored to their needs and, if possible, automated. From the tax auditors' point of view, appropriate solutions are also useful for speeding up the audit and providing a transparent overview of the company's processes. 

With automated processes, digital queries and auditable documentation, companies benefit from:

• faster and easier compliance implementation
• more efficient audit processes with fewer errors
• increased transparency for authorities and internal audits

Act now: Companies should invest in digital solutions at an early stage to ensure they are prepared for increasing compliance requirements. Our experts will be happy to render assistance with your questions.