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TAX TRIBUNE
37th EDITION
magazine
INNOVATION, INSPIRATION
AND ROCK’N ROLL
UPGRADING THE INTERNATIONAL
PROFILE BY HOSTING IOTA EVENTS
REINVENTING THE
TAX ADMINISTRATION
TAKING REGIONAL TAX
COOPERATION TO a HIGHER LEVEL
COOPERATION FOR
TAX DEVELOPMENT
WORKING
FOR IOTA
IMPLEMENTATION
OF SAF-T IN NORWAY
Tax Tribune magazine | June 2018
www.iota-tax.org
CONTENTS
INNOVATION, INSPIRATION AND ROCK’N ROLL
Hans d’Hondt, President of the Belgian Federal
Public Service Finance speaks about his passion for work and music
04
TAKING REGIONAL
TAX
COOPERATION
TO A HIGHER
LEVEL
08
REINVENTING
THE TAX
ADMINISTRATION
12
2 | TAX TRIBUNE magazine
TAX TRIBUNE magazine 37th edition
UPGRADING THE
INTERNATIONAL
IMPLEMENTATION PROFILE
OF SAF-T IN NORWAY BY HOSTING IOTA EVENTS
15 20
WORKING
FOR IOTA
COOPERATION Interview with
FOR TAX DEVELOPMENT Mr Massimo Morarelli
24 26
Published by IOTA, 2018, Budapest
Editorial Board: Miguel Silva Pinto, Ágnes Kővágó, Mark Crawford
Address: Wesselényi utca 16., H-1077, Budapest, Hungary
Phone: +36 (1) 478-30-30, Email: secretariat@iota-tax.org
ISSN: 1418-4818
TAX TRIBUNE magazine | 3
www.iota-tax.org
INNOVATION, INSPIRATION
AND ROCK’N ROLL
Hans D’hondt, President of the Belgian Federal
Public Service Finance speaks about his passion
for work and music
Mr D’hondt, you studied law and could was my professional mission.
have become a celebrated solicitor.
Instead you joined the Ministry of Coincidence therefore played a crucial
Labour in 1982 and made your way role?
after spending years at Minister’s
cabinets and the Ministry of Economy Yes, as it does for everyone. But of
to the FPS Finance in 2010. How come? course, most of all the motivation all
civil servants share: the general interest.
Indeed, I could have chosen a completely That still appeals to many people,
different path for my career. But I’m more than the money and a company
convinced that I have made the right car. You can think of all sorts of great
choice. It happened partly by chance: theories but in the end, you will find
I had been a lawyer for a year, but yourself in the ‘res publica’ or not, it’s
after my military service, I ended up a matter of temperament. A matter
working with the government and I of conviction. I have been active in
never got out. I didn’t want to leave, associations since my childhood: that’s
but I was never emotionally attached also the community.
either. The most important thing in
a job is to know that you are doing One of your achievements is that you
something that makes a difference: fundamentally professionalised the
for society, for the citizens. In a certain FPS Finance and run it as a company.
way I always felt that the “res publica”
Indeed, today our FPS works as a
company. But I don’t run it on my own.
Our management committee does. A Antwerp, Belgium (photo: Laya Gelencsér)
perfect company? No, but no company
works perfectly. We do use the same
instruments: management control, key We do not measure to harass our
performance indicators (KPIs), internal people: we want to know where we
control (risk management), project need to intervene to do things better,
management and a lot of technology of to move forward. That is a totally
course. Measuring is knowing. Because different system than before, when
Government services worked within a strict vertical hierarchy applied and
an existing legal framework with many the control was much more rigid. More
‘a priori’ controls, they did not always than 12000 of our employees work one
give enough attention to the need or more days a week from home with
to precisely define and follow up the a laptop and an internet connection.
work processes. We addressed this: in Our workflow of our back office is
regular “business reviews” we review completely digital. No paper: in many
the implementation of the strategic companies that is the future, with us
projects, we monitor our day to day it becomes reality.
activities using KPIs, ensuring the
functioning of internal control and risk
assessment, etc.
The headquarters of the Belgian Federal
Public Service Finance
4 | TAX TRIBUNE magazine
TAX TRIBUNE magazine 37th edition
ANTWERP, WHERE THE 25TH IOTA
FORUM OF PRINCIPAL CONTACT PERSONS
(PCPs) WAS HELD IN MARCH 2018
Belgium is quite strong when it comes a special hobby of Luc De Dobbeleer, to predict if an individual or company
to predictive analytics and datamining. the head of our Debt collection and who received a very high risk scoring
Tell us more about the projects the Recovery administration. in Delphi, will pay their taxes within
FPS Finance is currently working on! 1 year.
In 2001 the Federal Public Service of
Effectively managing the collection Finance started a reflection on risk The IRIS model predicts if a person or a
of tax debt is one of the major tasks management when we launched the company will pay their taxes within 14
undertaken by tax administrations. We Business process review with the other days after having received a phone call
have several datamining models all administrations. The objective was to from our Debt Relationship Management
named after Greek mythological figures, prevent big recovery problems. After (DRM) Unit, a call center we established
that we understood in 2015 to remind a predefined group of
that we must focus taxpayers of their fiscal obligation and
on bankruptcy as it is enhance tax compliance. This resulted
a major risk of non- in a tremendous increase in efficiency
payment of taxes. We with quick recoveries of unpaid taxes,
launched DELPHI, less administrative workload in the
our first data mining recovery process and an increase in
model, which attributes extra interest and enforcement costs
risk scores and later for the taxpayer. With Pegasus we
added HERMES, a predict the future payment resulting
model that we use from sending the file to a bailiff for VAT,
Wage Withholding Tax and Personal
Income Tax.
Mr D’hondt in the award ceremony of “Public organisation of the Year 2017” with the
Minister of Defence and Civil Servants Affairs of Belgium (Photo: Jonas Roossens)
TAX TRIBUNE magazine | 5
www.iota-tax.org
We took the predicting models to a policy making. We collaborated with
whole new level with ARANEO. We academics of the London School of Belgium contributes a lot to IOTA, you
used the input from 2011-2016 of Economics and Oxford University in send many speakers to workshops,
all the mentioned models and the a project where we tested different you host events and also sponsored
data behind these models, used SAS nudges (based on behavioural insights) a project. Why is IOTA important for
technology, social network analysis and on taxpayers and evaluated via RCT if the FPS Finance?
turned this into a visual tool predicting those made them pay their liabilities
the possibility of bankruptcy. earlier in the tax process. This resulted As the President of the Belgian Public
in great advantages for the state Service Finance, I am proud of what we
At the beginning of 2018 we started revenue (advanced (extra) revenue of have accomplished thus far in the IOTA
developing a new model “PEITHO” to taxes), to the tax administration (less network. In a globalising world, we need
predict the right duration of an instalment effort in pursuing debtors) and to the to internationalise our administration
payment plan. It will be used by our tax payer (avoidance of extra interests and our experts. Our colleagues in
collection agents in the next few weeks. and enforcement costs). Belgium and in any other country must
Next in line is implementing a complete be taught that whenever they face a
recovery strategy factorization, step More concrete, we ran an experiment certain problem, they must show a
by step, according to our processes. to see which nudges worked best proactive ‘international’ attitude and
when redesigning some letters and look at other countries facing most
Our FPS Finance sponsored the IOTA the results were amazing: a raise in tax likely the same problem to identify
Project on Measuring Debt Management compliance by 21,5% after 14 days! On possible solutions.
Performance which we hope will provide one hand the new letters advanced a
the IOTA membership with access to a lot of payments, but on the other hand IOTA plays a very vital role by implementing
range of examples of good practices. there was also an extra net income, a platform in which these contacts
which was estimated at about 4 million and best practices can be shared. We
Behavioural insights could help raising Euro, apart from the efficiency gains embrace IOTA’s efforts of bringing
tax compliance amongst taxpayers, on our internal resources. In total the experts together and we encourage our
using new and innovative practices. use of behavioural insights resulted in fellow colleagues in the IOTA member
What about the efforts of the FPS 17.622 extra liabilities with a payment, states to make sure that, whenever
Finance in using ‘nudges’? 15.329 extra liabilities fully paid and they do something innovative, they
18.790.911 EUR of accelerated payments share their solutions and innovative
We have learned that evidence-based after 14 days, in comparison with the practices.
policy making should be the new original reminder letter. Behavioural
standard and the ‘test-learn-adapt’ interventions are often low-cost, but
methodology results in more effective very effective.
Mr D’hondt addressing the 25th IOTA PCP Forum (photo: Laya Gelencsér)
6 | TAX TRIBUNE magazine
TAX TRIBUNE magazine 37th edition
for us to renew our commitment and Most musicians aren’t just passionate
take our international collaboration about the music but also about their
efforts to the next level by applying gear. Are you a Fender or a Gibson man?
for the Presidency of IOTA.
I’m afraid I am rather a “you never have
So much about innovation on the enough guitars”-man. So, I play a lot of
work floor, we have learned you have different guitars. Mostly Gibson but also
an interesting hobby? Fender, Gretsch, Ibanez, Rickenbacker,
Godin, Duesenberg, Takamine, etc.
Yes, I’m a music enthusiast. I have been My two favourite guitars are a Gibson
making songs since the 70’s. I still play ES335 natural and the Gretsch White
in a rock and blues band an in a duo Falcon my wife gave me when I reached
with our keyboard player who is a good the age of 50. So much better than a
friend since we both were 14 years surprise birthday party!
old. It is a rather traditional rock band
called ‘Supreme Court’. We play covers With your busy schedule, where do
as well as our own songs. The duo is you find the time for rehearsals?
called “Closing Time” named after the
first Tom Waits album released in 1973. Usually we rehearse on Monday evening
between 9 PM and 1 AM. At my age
Who inspired you to start playing it is as good to rock as it is to sleep.
music?
Any other passions you want to share
I started playing at the age of twelve. besides music?
International relations and contacts are At that age it is not really a matter of
a core strategic objective to the FPS being inspired: kids do just what they My job is my passion.
Finance and it is therefore important love to do.
TAX TRIBUNE magazine | 7
www.iota-tax.org
TAKING REGIONAL
TAX COOPERATION
TO A HIGHER LEVEL
Interview with Mr Márcio F. Verdi, Executive
Secretary of CIAT and Mr Miguel Silva Pinto,
Executive Secretary of IOTA about the first ever
joint Tax Summit in Lisbon
A historical event will take place this are exploring to keep pace with the
year: IOTA and CIAT in cooperation digital revolution.
with the Portuguese Tax and Customs Márcio F. Verdi, the Executive Secretary
Authority will organise the “Tax Summit of CIAT and Miguel Silva Pinto, the
on Digital Economy”, which will be held Executive Secretary of IOTA are
in Lisbon on 24 - 26 October 2018. deeply committed to their common
The first ever joint event of the two project as they think this summit is an
regional tax organisations will not only important step for connecting regional
connect Europe with the Americas tax administrations worldwide. The
but will also invite other regional tax two Executive Secretaries have a close
organisations widening the scope relationship for many years which has Lisbon the host city of the Tax Summit in 2018
of the conference to a global level. helped to realise their common vision.
Representatives from more than 80 We have asked them about the event
countries will gather to address the and their personal views on each other in the European Union beforehand. He
impact of the digital world on the main and the respective organisation. was part of the team that prepared the
areas of tax administrations’ activity. IOTA new strategy for 2018-2022 and
For three days, senior officials, experts Márcio F. Verdi is the Executive Secretary prioritized raising the international
and members of the tax community will of CIAT since 2010. Before, he was an profile of IOTA during his mandate.
exchange views on the most recent economist and a tax auditor
trends and solutions that advanced in the Brazilian Revenue
and developing tax administrations Administration (Receita
Federal de Brasil). Heading
the CIAT, he has worked
intensively to promote
cooperation amongst its
members, with a focus on
international taxation,
promotion of transparency,
ethics and information
technology applied to
tax administrations.
Miguel Silva Pinto is IOTA
Executive Secretary since
October 2016. He was
Deputy Director-General
of the Portuguese Tax and
Customs Authority before
joining IOTA, having held Miguel Silva Pinto and Márcio F. Verdi in the 52nd
CIAT General Assembly
several international jobs
8 | TAX TRIBUNE magazine
TAX TRIBUNE magazine 37th edition
“TAX SUMMIT ON DIGITAL ECONOMY”
IN LISBON ON 24 - 26 OCTOBER 2018
1. YOU SEEM TO KNOWING EACH of Executive Secretary of IOTA when
OTHER VERY WELL. WHEN DID the vacancy was announced in March
YOU FIRST MEET? WHAT WAS 2016.
AND WHAT IS YOUR OPINION
ABOUT YOUR COLLEAGUE? Marcio was also one of the first persons
to congratulate me when I was elected
Miguel Silva Pinto: I met Marcio in 2014, and he immediately envisaged the
in Rio de Janeiro while attending the possibilities to enhance the cooperation
48th CIAT General Assembly. I was then between our organisations
Deputy Director-General in the Portuguese
tax administration and my DG asked Márcio F. Verdi: As Miguel commented,
me to become CIAT’s correspondent we met at the 2014 CIAT General
for Portugal (equivalent to IOTA PCP). Assembly, and it was a great pleasure
It was my first contact with the Latin for me to meet Miguel, who was then
American tax administrations and I the Deputy Director of the Portuguese Márcio F. Verdi and Miguel Silva Pinto
was impressed with the technological tax administration; because immediately at the 21st IOTA General Assembly
level of development a number of them we related to each other, we shared
were going through. That impression common interests, we enjoyed the
has been confirmed over the years delicious Portuguese gastronomy, I was always concerned with the VAT tax
and I think the IOTA members’ tax Portuguese bakeries, the Brazilian in general, so we immediately became
administrations can benefit a lot by food, the Brazilian history. strongly acquainted. In addition, Miguel
learning what is happening in other On a personal side, we immediately was appointed the CIAT correspondent
regions of the world and also giving created a very strong empathy and, more for Portugal.
feedback on their experiences in many than anything else, I was delighted in
areas of their activity. the way that Miguel managed the issue Then, from there, I had the opportunity
of the VAT tax in Portugal. Portugal was to share with him the vision that I had
Right then I was impressed by Marcio’s recovering from a period of difficult and have about what an organisation
dynamics and enthusiasm when adjustments for the tax administration, like CIAT should be. I believe I could
conducting the General Assembly and after a financial crisis, and we had a transmit some of my passion about
his leadership skills. I admit that he lot in common regarding our views international cooperation, especially
inspired me to apply for the position on taxation. the role of the tax administrations.
TAX TRIBUNE magazine | 9
www.iota-tax.org
An organisation like CIAT has the
obligation to promote the exchange
of knowledge, to transform the
cooperation that we want into an action
of coordination, of joint actions, and
we have to progress on this path, as
a collective modernisation movement
of tax administrations in our member
countries. I remember very well our
early conversations on the importance
of IOTA, CIAT, and the other regional
and international organisations of tax
administrations.
2. WHAT IS THE POTENTIAL FOR The members of the Network of International Tax Organisations
A CLOSER COLLABORATION
BETWEEN IOTA AND CIAT?
and very important countries, both for administrations. It is not the first time
Miguel Silva Pinto: I would like to start CIAT and for IOTA, but in CIAT´s case, that Portugal has organised an IOTA
by saying that the cooperation between these countries provide much help to event and I am certain they will do very
IOTA and CIAT goes a long way back, the region. Since 1982, all of them are well with this one too.
since the two organisations signed full members, the European members.
a Memorandum of Understanding For many years, we have been mutually 5. DO YOU THINK THE JOINT
(MoU) in 2006 in Florianopolis, Brazil, participating in each other’s events. SUMMIT WILL CHANGE
building on information exchange and Therefore, should we not organise an THE MODEL FOR THE
joint projects already undertaken and event together? IOTA has a strength, COLLABORATION BETWEEN
establishing the background to take on the issue of the digital debate, with REGIONAL TAX ORGANISATIONS?
cooperation further. As a matter of the European Union and countries that
fact, the relations between the CIAT are so advanced in the areas of digital Márcio F. Verdi: Literally, I believe
and IOTA have been strengthened taxation. We too, in our region, we that yes, this summit, the meeting in
by reciprocal participation in each have countries that develop a world Portugal will transform the collaboration
organisation’s main events, such as leadership in the use of information between IOTA and CIAT. We will
General Assemblies and international technology. Therefore, we thought, prove that together we are stronger,
conferences. Other ways to cooperate “Is it possible? – Yes!” And then we because there are many topics of
have been developed, either in the consulted Portugal and there we found shared interest for both organisations,
framework of the ISORA project (where a decisive support: Portugal supported going from paper-free procedures to
both entities are members, together the idea immediately, bought into topics of blockchain and taxation of
with the IMF and the OECD) or through the proposal and now what we need the digital economy. We have countries
the participation in publications and is working together to turn this joint in the Latin American region that are
using the organisations’ networks to project into reality, and as an example world references in the use of digital
channel technical enquiries. We have of what we can and we must doas technology, such as Mexico, Brazil,
also expressed our wish to be engaged regional tax organisations. Argentina, Chile, Colombia, Peru, and
in the CIAT Ethics Committee and several others, and here I mention
are already exploring possible joint 4. THE JOINT SUMMIT WILL BE only the Latin Americans. Equally, we
participation in projects of mutual IN LISBON, WHICH DUE TO ITS know the importance of the use of
interest. The recent setting up of the LOCATION CAN BE CONSIDERED information in European countries. We
NTO – The Network of International AS A BRIDGE BETWEEN can exchange experiences because there
Tax Organisations - will without a EUROPE AND THE AMERICAN are topics where Latin America, in my
doubt provide new opportunities to CONTINENT. WAS THIS THE view, may provide useful information
use synergies and explore mutual MAIN REASON FOR HOLDING to the European countries. Especially,
benefits for our respective members. THE SUMMIT IN PORTUGAL? topics of invoicing and paper-free tax
administrations. These topics are not
3. HOW WAS THE IDEA AND Miguel Silva Pinto: Portugal is a platform new in Europe, but it is always good
CONCEPT OF THE LISBON TAX between different countries, people and useful to see the results that others
SUMMIT ON DIGITAL ECONOMY and cultures because of its history. are obtaining. Above all, we will see
BORN? So, every Portuguese is a natural that the greatness of the debate is to
born adventurer and always curious bring together 80-member countries
Márcio F. Verdi: The idea of the Technical to meet new people and experience to exchange about common topics of
conference of Lisbon, called Lisbon Tax new ideas and thoughts. Besides, the interest. I think this will be an historical
Summit on Digital Economy, emerged Portuguese Tax and Customs Authority event.
from meetings between Miguel and is a member of both IOTA and CIAT
myself, in which we realised, first, that we and has special relations with other 6. BOTH IOTA AND CIAT PLAY
have five member countries in common, Portuguese speaking countries and AN IMPORTANT ROLE IN
10 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
Miguel Silva Pinto as a moderator of CIAT’s 52nd General Assembly
THE INTERNATIONAL TAX a high level of knowledge. IOTA holds IOTA as an organisation that gathers
COMMUNITY. WHAT DO YOU an accumulated knowledge, perhaps together top-notch tax administrations.
THINK MAKES IOTA AND CIAT unique in the world. The European IOTA has somehow a role distinct from
SPECIAL IN THE INTERNATIONAL tax administrations together are CIAT, as I said before, and in our case,
ARENA? PLEASE SPEAK examples of all the areas that we can we must devote more efforts to the
ABOUT YOUR COLLEAGUE’S imagine for tax administrations, from aspects of human resources training,
ORGANISATION! the technical and operational aspects while with IOTA, we know that the
to the aspects of moral and ethical tax European tax administrations have a
Miguel Silva Pinto: I find the CIAT values, the tax culture, the culture of much higher average level of human
plays a key role in the regional tax compliance. Therefore, an organisation resources development. IOTA also
framework. By leading successful such as IOTA is considered by us as has the function of making sure that
and professional technical assistance an organisation that gather the best knowledge should come as the tide: it
programmes the organisation is that a tax administration can provide. must cause all the boats to rise on the
contributing to the development of Of course, CIAT also accumulates water. Even in Europe, there is always a
member administrations and supporting a great deal of knowledge, but our risk that some administrations progress
efficient tax administrations in Latin main characteristics, when I refer to at a faster pace than others, for many
America. No doubt this formula has the tax administrative development reasons, and IOTA’s role is to act as a
a great potential to expand to other level, are the differences that we have, buffer, a shock absorber, to prevent
regions, since new CIAT members will which are still very high, between the know-how from concentrating in
probably look for similar programmes. countries. This is valid for the other A or B countries, leaving the others
I also find their on-line training and tax administrations in the world, but behind, without bringing it equally to
professional courses format quite IOTA is different. IOTA gathers a high all the members.
interesting and useful to increase the level of technical capacity. A high level
knowledge and skills of tax professionals. of efficiency and effectiveness among IOTA, for sure, is an organisation that
The CIAT runs several projects such as tax administrations. We all look at has deserved the respect from all the
the Collection and Recovery Network others, because of the quality of the
and the Network on Availability of personnel of their Secretariat, and
Public Information of Tax Interest, especially because of the countries
which I think can be extended to other that are its members.
regional organisations and IOTA will look
for the opportunity to join in. Finally, WE WISH YOU A SUCCESSFUL
other possibilities to cooperate that SUMMIT AND WE ARE LOOKING
are worthy of consideration include FORWARD TO INFORMING
providing our respective members with OUR READERS ABOUT THE
opportunities to input in joint projects OUTCOMES OF THIS HISTORICAL
such as publications or studies and we JOINT EVENT!
will not miss the opportunity to work in
that field. The newly born NTO might
provide a good framework to do so on
a broader scale.
Márcio F. Verdi as a speaker of IOTA’s
21st General Assembly
Márcio F. Verdi: I think that IOTA’s
main characteristic is that it gathers
TAX TRIBUNE magazine | 11www.iota-tax.org
THE DANISH
CUSTOMS AND TAX
ADMINISTRATION (SKAT)
REINVENTING THE TAX
authorities, for vehicle registration and
a great number of other tasks.
SKAT’s total annual revenues amount
ADMINISTRATION
to approximately EUR 135 billion, and
these are used to fund Danish hospitals,
schools, roads, etc. In other words, SKAT
forms the economic backbone of a
well-functioning state welfare system.
Ms Winnie Jensen, Deputy Director General
of Legal and Mr Erling Andersen, International SKAT will undergo a fundamental
restructuring, transitioning from one
Director write about the experience of to seven independent agencies with
reorgansing the Danish SKAT clearly defined areas of responsibility.
The tasks have been structured to
From 1 July 2018, the Danish Customs to undermining public confidence secure important quality improvements
and Tax Administration, SKAT, will cease in SKAT’s services. In response, we in the way we work:
to exist in its present form. have executed a multi-step plan to
re-establish confidence and we are • clear lines of responsibility and
Even though SKAT is respected for its already underway with the first steps. strengthened management
performance compared to other tax
• increased specialisation and enhanced
authorities around the world, public SEVEN NEW AGENCIES
professionalism within individual areas
confidence in SKAT has suffered over
the past few years. The fall in confidence When we say that SKAT will cease • simple and easy payment of taxes
follows a number of adverse cases, to exist, we mean this literally. Today for individuals and businesses
including problems with implementation SKAT consists of one agency handling • effective and efficient enforcement
of new IT systems and refunds of a large number of complex tasks, from in all areas
dividend tax, where SKAT failed to assessing property values to checking • well-functioning and reliable IT
meet the high standards expected goods for customs purposes at the systems and high-quality data
from Danish tax authorities. These Danish borders. SKAT is also responsible
and similar cases have contributed for the collection of debt from public
12 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
FACTS BOX CLEAR LINES OF RESPONSIBILITY
AND MORE MANAGEMENT
Key considerations in the restructuring of the RESOURCES
Tax Administration (SKAT)
The new organisational structure allows
for clear lines of responsibility, more
Strengthen management Develop new IT systems and management resources, increased
accountability improve data
specialisation and enhanced professionalism.
Along with targeted investments and
Specialising and improving Efficient enforcement to increase adequate resources, these improvements
skills compliance
are all essential to raise the quality of
our work.
Easy and simple payment systems
In 1990, the Danish customs authorities
merged with the central-government
part of the tax authorities to become
• Danish Property Assessment Agency
An immense and complex task in 1
one administration known as ToldSkat.
– Public assessment of property
establishing seven new agencies lies 15 years later, the Danish Customs
and land
ahead of us. And at the same time, we and Tax Administration, SKAT, was
are facing other important challenges • Danish Tax Agency – Payment and established as we know it today,
that also need to be dealt with. We control of personal, business and following a merger between ToldSkat
are aware that the new structure, corporate tax and the local-government part of the tax
with seven agencies, will not solve all • Danish Customs Agency – Payment authorities. This led to a considerable
of the problems, but it will establish and control of customs duties increase in the number of tasks to
an essential foundation, so that we • Danish Motor Vehicle Agency – be carried out. SKAT was not only
can improve quality and ultimately Registration and calculation of vehicle responsible for collecting taxes from
re-establish public confidence. taxes and verification of payment of individuals and businesses, but also
these taxes for collecting customs duties at Danish
Seven new agencies will be established borders. Moreover, there was collection
to handle SKAT’s previous tasks. The In addition to these agencies, two of debt due to public authorities and
agencies will have their own management agencies will perform functions across assessment of property values.
and Directors General, and their individual the new Customs and Tax Administration.
areas of responsibility within the new One agency will be in charge of HR, While the merger generated economies
Danish Customs and Tax Administration accounting and procurement tasks of scale, it also created a very large and
(Skatteforvaltningen) (see organisation across the organisation; the other complex organisation, which over the
chart below). agency will be in charge of IT operations past years has proved to be too large
and maintenance as well as data and cumbersome. The organisation
ORGANISATION CHART processing. This second agency will has simply become too complex,
resulting in blurred lines of management
accountability.
The restructuring
Current structure
Political department
Establishing seven new agencies is a
complex and demanding task. It takes
time to build the organisations, get
The Tax Administration (SKAT)
systems in place and recruit employees,
and of course the positive effect on the
Gambling Tax Appeals
Customer Compliance Debt HR & IT and Finance Authority Agency
Service Collection Staff Data
App. 6500 government officials new agencies’ work will not become
evident overnight. Similarly, some of the
New structure One legal entity areas within the agencies will develop
Political department
faster than others.
Property Motor Debt IT & Administra-
Assessment Vehicle Collection Customs Development tion & Service Gambling Tax Appeals
Tax Agency
In the years to come, we will still be
Agency Agency Agency Agency Agency Agency Authority Agency
3500 empl. 650 empl. 1500 empl. 650 empl.
300 empl. 1100 empl. 350 empl.
facing major challenges that need to
Specialised agencies with different
core tasks
Multi-function agencies
Support and development functions
Existing agencies
be dealt with. Among other things, we
are going to develop new IT systems for
Serving individuals and businesses
debt collection, for property assessments
also be responsible of developing and and for customs assessments, and we
Five of the agencies will each have simplifying specific areas – especially will have to implement these in the new
core tasks within public sector revenue: within IT systems and processes. agencies. In addition, it is inevitable
that we will need to renew or replace
• Danish Debt Collection Agency – a large number of the backbone IT
Collection of debt due to public systems within personal, business and
authorities corporate taxation in the next decade.
TAX TRIBUNE magazine | 13www.iota-tax.org
Between now and 2020, almost
The challenges of the Tax Administration (SKAT) 3,500 new employees are expected
to be recruited, many of whom will be
Internal challenges replacing retiring employees. Today, a
Structure, geography and IT total of 6,200 employees work at SKAT.
• Large and complex organisation
• Skills mismatch
Specific tasks e.g. debt
collection, assessment of
In addition to investments in employees
• Execution of assignments geographically scattered
• Legacy data and IT systems
property values and customs
and IT systems, investments will be
• Poor data quality made in digital solutions to enable
simple, easy and correct payment of
External challenges taxes from individuals and businesses.
Globalisation and technological development
• Large and rapid financial flows
• Aggressive tax planning, tax avoidance and evasion, transfer Deteriorating confidence among The Danish Parliament wants a balanced
pricing, etc.
• Increasing complexity of tax assessments and audits
taxpayers
Denmark with a more even distribution
• Rapid technological development
of government workplaces across the
country and closer to individuals and
businesses. The historically high number
of relocations of government jobs from
This is a multi-year change journey, investments in data processing, IT the capital to other parts of Denmark
and our job is to make the transition systems, more employees and new in the coming years will also affect the
from one unified SKAT to seven new skills. In our opinion, this requires a restructuring of the Customs and Tax
agencies as smooth as possible for new organisational framework. Administration.
taxpayers.
Because of the many challenges
The journey towards changing the mentioned above, and the challenges
organisational structure and tasks is to come, we need to make sure that
expected to last until 2021. During the seven agencies are equipped for
this process, the new agencies will the tasks that lie ahead and are able
continue to build on best practice to meet their obligations effectively
to ensure that, despite the difficult and efficiently.
cases mentioned above, the Danish
tax authorities enjoy the confidence of At the heart of the plan adopted
the Danish Parliament and the Danish by politicians is a major injection of
taxpayers. resources to the Customs and Tax
Administration. In 2017, the Danish
MASSIVE INVESTMENTS IN NEW tax authorities cost approximately
EMPLOYEES AND IT EUR 712 million and the Government
is planning to invest around another
We have to rebuild large parts of the EUR 1 billion by 2020, with massive
current Customs and Tax Administration, investments in IT systems.
SKAT, from scratch and make massive
Ms Winnie Jensen in the IOTA Executive Council meeting in Copenhagen in March 2018 speaking about restructuring the Danish Tax Administration.
14 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
Implementation of
SAF-T in Norway
Ms Nonna Risnes, Senior
Adviser in the Norwegian
Tax Administration
(Skatteetaten) shares her
experience of learning from
participation in IOTA workshops
The Headquarters of the Norwegian Tax Administration
(Skatteetaten) in Oslo (Photo: Baard Brinchmann Loevvig)
SAF-T (Standard Audit File for Tax) is We looked at the possibilities of be reported on transactions level to
a standard electronic format used in electronic transmission of e-invoice data, e-invoicing where detailed information
the exchange of accounting data. It and believed that it could significantly from invoicing could be reported.
is the result of a joint development contribute to reducing such tax crimes
collaboration between the business as the use of false invoices, use of false Already from the 1990s OECD had
community, the accounting sector and invoices in chain fraud, non-reported initialized a process to standardize
the Norwegian Tax Administration, based revenue, as well as increase general accounting formats.
on a recommendation by the OECD. transparency in the transactions.
SAF-T has been designed to capture
Inspiration We came back from the workshop data from a number of areas found
inspired and full of “implementation” in a typical accounting system and
SAF-T started for me at a workshop in power. specifications, including:
February 2014 in Budapest “Engaging and
Involving SMEs and their Intermediaries PREPARATION AND LEARNING • General ledger
in Tax Administration Processes”. • Accounts Receivable
The focus of the workshop was to We brought home the experience from • Accounts Payable
exchange country experiences in order Portugal. We spoke with colleagues in • Fixed Assets
to increase compliance including use our Tax Administration. We also found • Inventory
of new technologies. out that Portugal had implemented • E-invoices
many reporting standards in the SAF-T • Cash registers data
Colleagues from Portugal told us about format, from a standard for General • Payrolls
e-invoicing during coffee breaks; about ledger where all transactions could • Etc.
the transmission of data to the Tax
Administration and about the effects;
how it worked and who we could
contact. We got some useful links and
documents. Portugal used to transfer
e-invoices in the SAF-T format directly
to the Tax Administration online or as
periodic reporting.
We also received a brochure from
Portugal about implementation of
e-invoicing where we found that at the
time e-invoicing was introduced VAT
revenue increased by approximately
16 percentage between September
2012 and September 2013. Nonna Risnes in a group discussion in the IOTA workshop “Engaging and Involving SMEs and their
Intermediaries in Tax Administration Processes” with Vinsent Kenrick from Ireland, Nuno Miguel Alves
Pinto from Portugal and Riita Oidsalu from Estonia in 2014 in Budapest
TAX TRIBUNE magazine | 15www.iota-tax.org
The Norwegian Tax Administration top
management decided in December
2011 to start a project to study the
consequences of introducing SAF-T in
Norway. The project started in October
2012 and was completed in April 2014.
By reviewing experience from other
countries together with documentation
from the OECD, the project concluded
that the consequences would be positive
both for the Tax Administration and for
the business community.
Through specialization in SAF-T I also
learned a lot about other electronic data
exchanges, including use of e-invoices
in Norway, to a limited extent.
Norway used the electronical standard
format EHF (elektronisk handelsformat)
to send e-invoices between buyers
and sellers for the government (from
2012) and municipalities (from 2015),
companies and organisations. EHF
is based on the European standard
(UBL, CEN, and PEPPOL BIS). It is not
mandatory for businesses to transfer
data to the tax authority as of today. Oslo
In January 2015, we participated in the with direct transfer to the authorities.
workshop “Promotion and Facilitation We found the presentations from The top management at the Norwegian
of Electronic VAT Invoices” in Budapest. Portugal and Luxembourg about the Tax Administration decided to initiate
This workshop focused on key aspects use of SAF-T to transfer data to the an implementation project for SAF-T
of electronic invoicing, the changes of tax administration particularly useful. Financial (General Ledger, Accounts
the EU rules for VAT invoicing and the We have gained useful contacts with Receivable, and Accounts Payable) in
initiatives and practical approaches colleagues also from other countries. March 2015.
used by the IOTA tax administrations to SAF-T was one of the main suggested
promote and encourage the adoption of follow-up topics from the workshop. There are always many projects running
electronic VAT invoices. Many countries concurrently in the tax administration.
already used e-invoicing by then. INITIALIZATION Some projects should be prioritized, and
some projects should not be prioritized
There were different understandings There was an opportunity for a more or should wait for their turn.
regarding what e-invoicing was, ranging systematic introduction to SAF-T in
from email with an attached invoice in Norway, and it turned out that it was In the 2015 White paper, the new Cash
PDF and the use of the same electronic the right time for it. Register Systems Act was proposed.
invoice format mandatory for all, and In addition, it was recommended to
use SAF-T as a standard electronic
format for the storage of cash register
data for both accounting and tax audit
goals. In 2016 a separate project for
implementation of the Cash Register
System Act including SAF-T was started.
Therefore, it would be SAF-T Financial
and SAF-T Cash Register Data first.
The situation is more unclear regarding
e-invoicing. Although many in the Tax
Administration and other stakeholders
were in favour of assessing implementation
of e-invoicing.
Ms Nonna Risnes with her colleague Rune Tystad in the IOTA workshop “Promotion and Facilitation
of Electronic VAT Invoices” in Budapest in 2015.
16 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
In August 2015, we had the first meeting them to participate in the work group. and sent emails to our colleagues in
with of the SAF-T project group. There many countries.
was a lot to do in half a year: Outcomes from the workshop included:
When doing this you realise how
• Facilitate cooperation between the • Expected strong project management important it is not only to participate
Tax Administration, accounting and coordination from the Tax in the workshops, but also to build
system suppliers and interest groups Administration your networks during the formal and
informal social events that happen
• Assemble a working group with • Starting with limited format and
within IOTA.
participants from the Tax Administration, gradually go to larger amounts of data
interest groups and accounting • SAF-T is a dream situation regarding The answers came straight away
system suppliers system integration and provides mind- from Latvia, Poland, France, Spain,
• The work group was going to create blowing simplification perspectives Luxembourg, Belgium, Estonia and
an XML-file for SAF-T Financial. with easy transition many others. We got links to public
SAF-T Financial would be the first websites, presentations and many
step under the SAF-T umbrella and HELP other very useful documents. There
would include General Ledger, Account were also important explanations as to
Payable and Account Receivable by We needed to gather and update the why some countries should introduce
transactions level. international experience on the use SAF-T and why some countries should
• The project group had to develop of accounting standard formats. It is not introduce SAF-T. Standards in some
a proposal for the step by step usually open public information. The countries were in English and in other
introduction of SAF-T Financial in challenge was that information about countries other national languages, so
Norway. the standards was often in other national we had several rounds of email with
languages and SAF-T might have different the colleagues from IOTA.
• Gather and update experiences
names. For example, in Luxembourg
and status about SAF-T and other
FAIA (Fichier Audit Informatisé AED) We learned that there were different
electronic accounting formats in
is used and in France “FEC” (“Fichier ways to introduce SAF-T in different
other countries
des écritures comptables”). countries.
We contacted all system suppliers that Some only introduced a new regulation,
We needed help to find direct links online some required data deliveries. Some
we were able to find at this time, as well
so we could retrieve information about administrations carried out comprehensive
as interest groups and invited them to
the standards in different countries as introduction work with system suppliers
a cooperation meeting in September
well as their status and experience. and businesses before it became
2015. We gave information about the
work, listened to their expectations, mandatory.
We used email lists from IOTA events
discussed common goals and invited
TAX TRIBUNE magazine | 17www.iota-tax.org
There were also different ways of delivering portal for providing electronic forms to accounting system suppliers. The system
accounting files to tax administrations. public authorities. The intention was that suppliers should customize the use of
Someone had established a fixed SAF-T files could be delivered directly XML for each accounting system. The
channel with direct data transfer; some from an accounting system to the tax tax administration was responsible
generally accept delivery on physical administration via the Altinn -portal. for establishing the standard and
media such as CD and memory stick. guidance and to catch up with errors
There were many discussions about and omissions of XML-file and possibly
IMPLEMENTATION whether the standard should be initiate changes.
mandatory in Norway or not. We came
In March 2016, the XML file to SAF-T to the conclusion that experience from In June 2016, consultations on the
Financial was finalised and approved. other countries states that usually those proposals for amendments to make
countries that require the standard SAF-T mandatory were concluded
The top management at the Tax to be mandatory for use have wider with the deadline for mandatory
Administration approved the next step application of the standard. We would implementation from January 1, 2017.
of the project: make SAF-T mandatory for all businesses
who have bookkeeping obligations, Moreover, every IOTA event gave us
“The project will ensure that businesses or in other words must provide a tax new contacts and inspiration for SAF-T
can provide accounting information report or VAT report. development.
to the Tax Administration on a fixed
electronic format; SAF-T, from 1 January The Directorate of Taxes received In September 2016, in Riga, at the
2017, and that the Tax Administration a letter of formal notice from the workshop “Tracking Cash Flow in
can receive and process the information Ministry of Finance in March 2016 to Relation to E-commerce Activities”,
properly.” prepare a consultation memorandum we met with our French colleagues.
with an assessment and proposal to France had already introduced SAF-T
The project was intended to ensure a introduce the obligation to reproduce (FEC in French) in 2014. The discussions
smooth introduction of SAF-T Financial accounting information in standardized continued in the evening and we were
in Norway. form (SAF-T). the last guests in the restaurant where
As it turned out later, it was a necessary we had a joint dinner and finally had
The project´s main tasks were: choice. Large foreign accounting system to leave due to closing time. As we
• Dialogue with the stakeholders suppliers could not begin development understood the implementation is not
work without this being a statutory always easy, we would encounter some
• To build an effective transfer channel
requirement. resistance, but the world is moving
forward and accounting formats are to
The Norwegian Tax Administration uses
The work to implement the standard be standardized -.SAF-T is the future.
Altinn, the Norwegian public Internet
for businesses was imposed on
Group photo of the participants of the IOTA workshop “Tracking Cash Flow in Relation to E-commerce Activities” held in September 2016, in Riga
18 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
CHALLENGES AND DECISIONS THE WAY FORWARD
Charts of accounts The introduction of SAF-T also triggered
discussions in Norwegian newspapers
There is no common chart of accounts between the accounting industry and
for Norwegian companies; everyone the tax administration in the autumn
adjusts the use of accounts for their of 2017. How much data shall be
individual business needs. In SAF-T handed over to the tax administration?
Financial standard accounts shall be Is it advisable at the time of political
used to make it possible to develop discussion whether the authorities
standard analysis forms, and to make should at all times have access to all
tax audit more automated and effective. transactions in the accounts of the
companies and are we on our way to
The first proposal suggested that all Georges Orwell’s future novel “1984”?
enterprises should map the accounts to At the same time, the Director of
The SAF-T Financial Standard Accounts. Skatteetaten assured in his reply that
the Norwegian Tax Administration does
The challenge was the introduction of not receive more data than is legally
SAF-T for special industries such as required. Efficiency and simplification
banking, finance and insurance. Many will never go beyond legal rights.
numbers, multiple computer systems
The building of Oslo East Regional Tax Office
and special reporting characterise (Photo: Baard Brinchmann Loevvig) The implementation of SAF-T Financial
them. The mapping would have been should also be open to other formats
meaningless here since the specific system without any deviations. under the SAF-T umbrella. All cash register
accounts disappear. We also lose all system suppliers are already required
information and reporting will consist For larger enterprises that use multiple to implement XML i SAF-T format for
of two lines that make no sense. systems and customisation it is more storing of electronic information for
complicated to arrange for disclosure the systems sold from 2017. Use of
After several meetings and discussions of accounting information in the SAF-T the cash register systems with SAF-T
with the financial services industry, we format. According to Deloitte, SAF-T component is mandatory for business
agreed the need for special adjustment. implementations can take anywhere from 2019. The cash register data in
from a few months to almost a year. SAF-T format is currently used only
According to the latest version of user for control purposes.
documentation of SAF-T Financial, the Businesses, system suppliers and
mapping of The Chart of Accounts must government organisations had mentioned SAF-T Financial in Norway is used
be, by choice, one of the following: in the consultation that everyone was now for control purposes only, but in
- The SAF-T Financial Standard Accounts positive about the standard data format, the future, SAF-T, or maybe a more
- The Income Statement for the type but suggested time for introduction modern format, will form the basis
of business. needed to be expanded. The introduction for direct transfer of data that will be
means not only mapping and XML, the base for tax and VAT returns. It
Another spin off from the project was but also implementation in all systems will be transferred in the same way
the standardisation of the accounts for and training of personnel. In addition, as the tax administration receive third
municipal companies in XLSX format. feedback from the financial industry party information now, for example
Prior to this, they only had the chart stated that they needed more time from banks about taxpayers accounts
of accounts as text. for introduction due to complicated and use this information in the prefill
computer systems and additional tax return for employees and seniors.
For municipalities, the mapping of the reporting requirements. We do not know when there will be
accounts must be to the municipal a political consensus in society about
accounts. We have done ”temperature measurements” direct use of accounting data, but we
with the system suppliers on how system know that data standardization and
The co-operation with SAF-T opened development worked in January 2017. direct data transfer is the future.
discussions in the accounting community Most have said that they have come
in Norway for harmonizing charts of a long way with development and will FOR THOSE WHO WANT TO
accounts for different purposes. complete the implementation of SAF-T KNOW MORE ABOUT SAF-T IN
in their systems, if necessary, by 2018. NORWAY, WELCOME TO OUR
Deadline SITE IN ENGLISH:
After many discussions between the
Since the largest part of development parties involved, in December 2017, https://www.skatteetaten.no/en/
work with SAF-T was imposed on system the Ministry of Finance made the final business-and-organisation/starte-
suppliers, the simplest introduction changes to the regulations, so that the og-drive/rutiner-regnskap-og-
would be with smaller enterprises using obligation to disclose bookkeeping kassasystem/saf-t-financial/
standardised accounting systems, and information in SAF-T enters into force
included the use of accounts in the from January 1, 2020.
TAX TRIBUNE magazine | 19www.iota-tax.org
UPGRADING THE
INTERNATIONAL
PROFILE
BY HOSTING IOTA EVENTS
Mr Samson Uridia, Head of International
Department of the Revenue Service of Georgia
writes about the benefits of hosting IOTA events
The Georgia Revenue Service, which a help in modifying and further developing
constitutes single and unified agency existing approaches as well as to launch
responsible for tax and customs new initiatives. While being active
administration as well as SPS border in different international fora, in this
control, was created in 2007. article special emphasis is put on the
importance and benefits gained from
The reformed organisation and membership in IOTA, as ia unique
modernised business processes of the platform for experience, sharing and
Georgia Revenue Service (GRS), inter collaboration.
alia, resulted in better quality taxpayer
services as well as improved tax GRS became a member of IOTA in
collection. At the same time in parallel 2004 and in addition to our active
with reforming its tax administration involvement in several working and
GRS also took the decision to position steering groups and hosting IOTA
itself as a proactive member of the events, the administration also became
international tax community. In this a member of the Executive Council
regard the administration is eager not in 2017.
only to benefit from the experience of
others but also to share its achievements The groundbreaking decision for GRS
and contribute positively and actively in collaboration with IOTA was hosting
to the international tax agenda. The the first IOTA workshop in 2012, when
sharing of experience with colleagues the Service was able to see tangible Tbilisi
serves as a useful mechanism to reassess benefits from contributing to the work
reforms already undertaken, obtain of an international organisation.
feedback, and get practical insights to
Hosting involvement has been broad in scope
as you can see from the list of the events hosted in Georgia:
IOTA Case Study
Workshop
19 – 21 September 2012
``Auditing Individuals & Legal
Entities in the Use of e-Money``
20 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
Workshop
11-13 September 2013
``Evaluation of the
IOTA
Technical Workshop Measures Used to
Influence Taxpayers``
EVALUATION OF THE MEASURES USED TO
INFLUENCE TAXPAYERS’ BEHAVIOUR AND
COMPLIANCE
POST-EVENT REPORT
11 – 13 SEPTEMBER 2013
KVARELI, GEORGIA
TAX TRIBUNE magazine | 21www.iota-tax.org
Special
Interest
Workshop
17-19 September 2014
``Modernizing Payment
Methods``
Workshop
20-22 October, 2015
``Effective Use of Intelligence
and Research to Find New
Segments and New Areas of VAT
Fraud and Tax Evasion``
Meeting of IOTA
Area Group Debt
Management
5-7 October, 2016
``Use of Behavioural Economics
in Reducing Tax Debts``
22 | TAX TRIBUNE magazineTAX TRIBUNE magazine 37th edition
15-16 March 2017
``24th Forum of IOTA Principal Contact Persons``
Workshop
24-26 April, 2018
``The Newest
Possibilities and
Future Trends of
Taxpayer Service``
In addition, the administration has of an international agenda by the above in mind, last year GRS went even
already hosted a number of international mentioned officials. Furthermore the further by putting itself forward as a
events, including several workshops hosting of events also contributes to candidate to become a member of IOTA
and administrative events organised by raising the awareness of IOTA within Executive Council, also realising the
IOTA in our country. There are several tax administration and its management. importance of being actively involved in
benefits which encourage and justify Last but not least it is also very good the planning and management process of
our decision to host IOTA events in investment aiming to capitalise on the organisation and ensuring a regional
Georgia. The first is the great possibility the financial contribution to the IOTA presence as well as representation as
for GRS to send more tax officials budget and to share Georgian culture, an emerging country in the Executive
to attend and thus give them extra hospitality, landscape with participants. Council. Believing that we were able
motivation and opportunity to gain Active contribution and involvement to contribute to the progress made
new insights, providing opportunities in different IOTA fora serves in by IOTA, GRS feels more confident
to set up valuable working networks providing insights as well as offering in seeking IOTA members’ support to
with colleagues in other administrations assistance in our efforts to modernise become an Executive Council member
which often results in prioritisation of our tax administration in line with best in 2018 as well, for the second year
the discussed issues and developing international practice. Bearing all of the in a row.
TAX TRIBUNE magazine | 23You can also read
