Loyens & Loeff

Horizontal monitoring & compliance agreements

The working method of the Dutch tax authorities is changing from vertical monitoring towards horizontal monitoring. Although vertical monitoring will not disappear, horizontal monitoring becomes more important. Where vertical monitoring is based on checking retrospectively, horizontal monitoring is a form of working in the present based on mutual trust, understanding and transparency between the enterprise and the tax authorities. Horizontal monitoring consists of two elements. On the one hand, a good relationship between the tax payer and the tax authorities which is recorded in a compliance agreement (‘handhavingsconvenant’) concluded with an enterprise or a trade organisation. On the other hand, good risk detection, which is based on what is known as the tax control framework. We have a special team focusing on horizontal monitoring, the (negotiation of) compliance agreements and the advisory services related to the implementation of a tax control framework.

See also Tax Assurance.