Abstract
International Compliance Assurance Programme (ICAP) of OECD, a brand-new application, is the international reflection of the tax compliance expectations rising over cooperative compliance. ICAP is an application in which the tax risks of MNE groups are evaluated by bringing together the tax administrations of more than one country in which they operate and the relevant MNE group, and it has the capacity to create positive outputs at the point of ensuring voluntary tax compliance based on the establishment of tax certainty and consistency. In this study, the charactetistics, composition, and function of ICAP is revealed with the concept of cooperative compliance by comparing similar concepts with ICAP. Based on these elements, the chapter discusses Turkey's future participation in the programme.
TopTaxpayers’ Attitudes Towards Taxes: Compliance Or Non-Compliance
Taxes can be approached as a financial burden on taxpayers, so it is observed that some taxpayers can resist taxes. It is possible for taxpayers to choose strategies like avoiding the taxable event or acting in non-taxable areas, as well as to avoid paying taxes in ways that the legislator does not intend, or to evade taxes illegally. This broad range of taxpayer behaviours or attidutes brought the issue of tax compliance out. Before examining the framework of cooperative compliance and ICAP, it would be appropriate to look into the models we encounter in the evaluation of taxpayers' attitudes towards taxes. Since ICAP, as a concept, is based on the enhanced relationship between taxpayers and revenue authorities, we need to focus on this relationship. Due to the fact that interaction between revenue administrations and taxpayers is determined by their basic assumptions about the others’ goals and strategies (Kirchler, E., 2007: 168) compliance behaviour of taxpayers are also influenced this perceptions.
Individual interests conflict with collective interests under the tax system, posing a societal conundrum. Within this perspective, the taxation relationship contains a conflict of interest which poses the non-compliance problem. This problem is as old as taxes themselves (Kirchler, E., 2007: 103) and the literature has looked at the non-compliance issue brought on by the above-mentioned conflict of interest from a number of angles. Within this context, there are two basic approach to the issue of (non)compliance in the literature which are based on economic rationality and wider behavioral concepts (Baisalbayeva, K., 2014).
Key Terms in this Chapter
Avoidance: It is typically used to describe how a taxpayer arranges his affairs in order to lower his tax bill. Although the arrangement may be strictly lawful, it is usually at conflict with the spirit of the law it claims to serve.
Evasion: Typically used to refer to illegal arrangements where tax liability is concealed or neglected, i.e., the taxpayer pays less tax than he is legally required to pay by concealing income or information from the tax authorities.
Tax Authority: The organization in charge of enforcing a jurisdiction's, region's, or municipal government's tax rules.
Transfer Pricing: A transfer price is the amount an enterprise charges a subsidiary or other affiliated entity for goods, services, or intangible property. When revenue and expenses are unfairly allocated to lower taxable income, this is considered abusive transfer pricing.
Tax Compliance: The extent to which a taxpayer complies (or does not comply) with the tax laws of his country, such as by disclosing income, filing a return, and timely paying the taxes required.
Advanced Ruling: It is a written document that tax authorities send to a taxpayer in which they interpret and apply the tax law to a particular set of facts.
Permanent Establishment: Term used in double taxation agreements or tax legislation to describe a circumstance where a non-resident entrepreneur is taxable in one nation but is exempt from paying income taxes in the other country unless they have a “permanent establishment” through which they conduct business there. Even if it has a PE, only the portion of the income that is “attributable” to the PE will be subject to taxation.
Multinational Enterprises (MNE’s): MNE’s are enterprises or groups of enterprises with locations in two or more different countries.
Cooperative Compliance: It is the development of a trust-based relationship between tax administrations and taxpayers that is based on voluntary tax compliance and results in the timely payment of the correct amount.
Parent Company: The parent company is the enterprise that holds a sizable portion of the capital stock of the subsidiary.