Foreign Experience in Tax Consulting

Publication date/update: 23.06.2024
Tax consulting abroad encompasses a range of advisory services within the framework of each country's tax legislation. This practice is vital for both the state and business owners. European and American experiences often serve as a basis for developing corresponding laws in Russia. This article delves into the tax consulting practices in some developed countries.

Tax Consulting in Germany

Germany is known for its high taxes and progressive tax scales. A special law, "On Tax Consulting," has been developed to regulate this activity comprehensively. This law is crucial for preventing fraudulent practices, ensuring that only licensed and educated tax consultants provide these services.

Typically, a tax consultant in Germany helps clients balance economic benefits with minimized tax risks. Their roles include:
  • Assistance with declarations and payroll calculations, often including insurance contributions for employees.
  • Tax planning for reporting periods for individual entrepreneurs and LLCs.
  • Finding legal ways to reduce the client's tax burden.
  • Signing agreements or powers of attorney to represent clients in court, enabling the consultant to sign declarations and reports on behalf of the client.
  • Identifying risks of non-compliance with German laws.
  • Representing clients before government authorities and in court.
  • Handling pre-trial disputes with tax authorities.
  • Resolving various client tax issues.
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Ireland is considered one of the most liberal countries for professional communities, including tax consulting. No special license or membership in a professional association is required to offer tax consulting services; a degree in accounting or law suffices. Available tools for local consultants include:
  • Specialized forums on the tax authority's website.
  • Professional journals.
  • Electronic newsletters for consultants.
  • The country's Tax Institute.
Consultations usually happen electronically, making the process swift and accessible. Business owners may also opt for face-to-face meetings or cooperation agreements.

Organization of Consulting in Austria

Austria's law "On Professional Activities Related to Economic Management" regulates consulting services, allowing outsourcing in the following areas:
  • Tax and economic law consulting.
  • Preparation of accounting reports.
  • Comprehensive accounting services.
  • Internal audit organization.
  • Insurance matters.
  • Optimization issues within a company.
  • Representation in tax authorities.
  • Preparation of expert opinions on tax and accounting matters.
  • Handling commercial secrets for high-quality judicial assistance.
Overall, tax base optimization is not customary in Austria; therefore, consulting focuses on addressing economic planning tasks.

Consultants in Austria must meet strict criteria
  • Full legal capacity.
  • Stable income.
  • Insurance covering potential client damages from consultations.
  • Residency in Austria or another EU country.
  • Relevant work experience.
  • Passing an exam before starting work.
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Interesting Aspects of Tax Consulting in the UK and France

In the UK, tax consulting is not tightly regulated. Lawyers, accountants, and financiers can provide these services, often opting for voluntary insurance to cover client losses.

In France, only qualified tax lawyers or accountants can offer consulting, primarily to small firms. Consultants do not represent clients in court, and a self-regulating organization oversees their activities.

How it Works in the Netherlands

Tax consultants can join one of four self-regulating organizations in the Netherlands, which set professional standards, ethical codes, and disciplinary boards. Consultations focus strictly on tax control issues.

The Situation in Eastern European Countries

Countries like Poland, the Czech Republic, and Slovakia form the Visegrad Group for tax consulting, characterized by:
  • Special laws regulating activities.
  • Consultants needing higher education, experience, academic degrees, and passing exams.
  • Mandatory membership in a professional association.
  • Full legal capacity.
  • Government involvement in qualification commissions.

Tax Consulting in the USA and Canada

The US tax system is complex, with harsh penalties for tax crimes, including imprisonment. Key points include:
  • Progressive federal tax scales.
  • State-specific taxes.
  • Concurrent federal and local taxes (e.g., two types of income and property taxes, three levels of excise duties).
  • Social contributions from both companies and employees.
Due to the complexity, many individuals and small businesses rely on tax consultants, who are usually lawyers or accountants.

In Canada, the three-tier tax system includes federal, provincial, and municipal levels, with prevalent direct taxes. Consultants often hold economic degrees and provide long-term advisory services.
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