Assistance with tax penalties and penalty investigations
Our Tax Controversy & Litigation team supports companies, Tax Directors, CFOs and directors throughout all stages of a tax penalty investigation. We advise on administrative penalties, penalties for negligence or intent, information orders, directors' liability and the defence of tax positions. We combine our extensive experience in tax procedural law with in-depth knowledge of all tax disciplines and industries.
A timely and strategic approach can be crucial in limiting financial exposure, reputational damage and lengthy proceedings. We assist clients in their interactions with the tax authorities, objection and appeal proceedings, and complex tax disputes in which penalty-related issues play a significant role.
Questions about a tax penalty or penalty investigation?
An early assessment of your situation can make a significant difference to the course and outcome of a penalty investigation. Our Tax Controversy & Litigation specialists support companies, Tax Directors, CFOs and directors in managing tax risks and resolving disputes with the tax authorities. Please contact one of the specialists below to discuss your situation.
FAQ
Can a director be personally subject to a tax penalty?
Yes. Under certain circumstances, the tax authorities may impose a tax penalty not only on a company, but also on a director or de facto manager. This may be the case, for example, where the tax authorities believe that there has been intent or gross negligence. A timely assessment of the facts and the legal position of the director concerned is therefore essential.
To what extent am I required to provide information during a tax penalty investigation?
When the tax authorities are considering imposing a tax penalty, your rights and obligations change. In certain situations, enhanced legal safeguards apply and you may not be required to cooperate with every request for information relating to the conduct that could give rise to the penalty. It is therefore important to assess at an early stage which information obligations continue to apply and which defence rights may be invoked.
What are the consequences of a tax penalty beyond the financial sanction?
The impact of a tax penalty may extend well beyond the financial sanction itself. Businesses may face reputational risks, increased scrutiny from the tax authorities and greater attention from stakeholders. For multinational organisations, tax penalties can also affect ongoing interactions with foreign tax authorities and raise broader tax governance and compliance considerations.
When should specialist assistance be sought?
Engaging specialist advisers at an early stage of a tax penalty investigation can be critical. Once the tax authorities indicate that they are considering a penalty, strategic decisions need to be made regarding the handling of information requests, interactions with the authorities and the development of an effective defence strategy. Early intervention can help manage risks, protect procedural rights and enhance the likelihood of a favourable resolution.
