## Box 1. Responsibilities of an International Tax Unit ## Source details **Canonical URL:** [Box 1. Responsibilities of an International Tax Unit](https://www.imf.org/-/media/files/publications/howtonotes/2025/english/htnea2025008.pdf) ## Other formats - [Markdown version](/-/media/files/publications/howtonotes/2025/english/htnea2025008.pdf.md) - [Structured JSON version](/-/media/files/publications/howtonotes/2025/english/htnea2025008.pdf.json) --- ### General description and purpose - Framework: The Framework for International Tax Administration Strengthening (FITAS) is an assessment tool to evaluate a tax administration’s capacity to manage international tax risks and to develop prioritized, sequenced action plans to address identified weaknesses. - Structure: The assessment tool evaluates six FITAS categories against a three-stage continuum representing progress toward international good practice: - (1) emerging - (2) progressing - (3) established good practice - Assessment mechanics: - For each FITAS category and element, questions guide reflection and rating. - Consolidated judgments are required when multiple questions apply to an element; category ratings derive from component element ratings using assessor judgment rather than simple averaging. - Table 3 presents a summary assessment format suited for senior management to encapsulate the administration’s consolidated status. - Primary outcomes: - identification of administrative and policy capacity gaps - inputs for an overarching strategic roadmap - prioritized action plans - technical assistance priorities - engagement with partner agencies ### How to rate and assess - Role of partners: Development partners (for example, the IMF) can compare international good practice with a jurisdiction’s laws and practices and provide quality assurance. - Self-assessment: Administrations may undertake self-assessments, but a quality assurance process by experts with international tax experience is recommended. - Tailoring: The assessment tool is generic and can be tailored where development partner assistance is available (including tailoring to legal frameworks). - Assessor guidance: - Apply professional judgment; some elements may carry greater importance and a weak critical element may require rating the entire category at the lower level. - Avoid over-rating; where doubt exists, choose the lower rating and document the rationale behind each rating. - Use a multidisciplinary subject-matter expert team (examples: legal, international division, audit, human resources). - Consult external stakeholders (Ministry of Finance, courts, professional associations) where possible. - After quality review, submit findings to the Management Committee for approval; the Management Committee provides strategic direction and appoints officials to lead implementation. ### People - Need: Increasing need to professionalize the tax administration workforce, particularly in international tax, due to growing complexity, technological advances, and diplomatic/economic relations. - Multidisciplinary expertise typically required: data scientists, economists, IT experts, analysts, international tax law experts, and auditors. - Key human resource priorities: - competency-based recruitment and workforce planning - recruitment of staff with required qualifications (including foreign language skills) and personal qualities - competency definitions linked to job types to guide recruitment and promotion - competency-based recruitment applied as pilot/trial in international tax where organization-wide rollout is not immediately feasible - Training and development: - systematic ongoing approach combining formal training, coaching, and on-the-job development - emerging systems may require external technical assistance and practical exposure - progressing and established systems use organized training delivered by highly skilled practitioners and assess performance by field results ### Systems and Compliance Risk Management (CRM) - Systems role: Effective CRM requires access to modern IT systems and a wide range of data from diverse sources; focus on systems support for international tax CRM for MNEs. - Systems coverage: data onboarding, storage, analysis, exchange, and security across three analytical levels: - systemic: identify, quantify, prioritize systemic risks using all national data holdings about MNEs (structured and unstructured) - operational: develop and implement Compliance Improvement Plans (CIPs) for key taxpayer segments, industry sectors, and focus areas; models for risk analysis and case selection should target treatments commensurate with risk - tactical: risk-based case selection, taxpayer profiling, pattern detection, visualization, and social network analysis to detect related-party dealings - Capability by system maturity: - established system: unified electronic access to all relevant data, a range of profiling tools, visualization, social network analysis - progressing system: some profiling capacity with fragmented data and basic software; limited sophisticated tools - emerging system: largely manual processes and limited data - Benefits: Maximizing data use and modern technologies supports better service delivery, control over tax evasion, and transparency; revenue gains from better international tax risk management can help build IT business cases. ### Tools - Core tools to strengthen international tax capacity: - an international tax CRM approach leading to a Compliance Improvement Strategy (CIS) and operational CIPs - a strategic roadmap and sequenced action plans aligned with FITAS assessment outcomes and international tax CRM priorities - treaty networks (where appropriate) to provide certainty and prevent double taxation—terms must support both parties’ interests - participation in international cooperative forums assessed against membership benefits (access to data, data exchange, support, training) and costs/obligations - Standard Operating Procedures (SOPs) and procedural manuals to support consistency and quality; specialization of staff where feasible - Jurisdiction specificity: The CRM approach should be jurisdiction-specific, accounting for MNE presence, legal framework, treaty network, and organizational capacity. ### Data - Priority: Addressing data availability and management shortcomings is a priority; absence of a sound data set and data management framework limits ability to identify and manage international tax risks. - Possible data sources: - taxpayer filings and reporting (withholding tax returns, financial institution reporting) - audit and taxpayer interaction records - third-party/regulator data (financial services regulator, stock exchange) - environmental scanning and research - international data sharing - Analytical needs: systemic, operational, and tactical analyses require both bulk data and individual case-level data, and internal and external sources. - Data strategy and roadmap should: - identify what data are needed and what can be legally obtained - prioritize sourcing data to administer the current legal framework and mitigate priority risks - manage and protect data for international cooperative forum participation - plan for additional data needs tied to legal framework strengthening - Legal aspects: - laws may be required to authorize collection/access to prescribed bulk banking data, international funds movement records, and prescribed MNE reporting - law should ideally allow specification of formats and transmission methods and permit updates without continuous amendments - Alignment requirement: Systems and people capacities must be aligned with the data strategy (systems for use and confidentiality; people with skills to manage, analyze, interpret data). ### Legal framework - Reform timing: Law reform may be required early, recognizing long lead times; legal reform is necessary but only effective when supported by other administrative features. - Roadmap: Roadmap and action plan for legal reform should be informed by analysis of the jurisdiction’s international risk profile and government policy objectives. - Scope: Legal structure includes both domestic laws and tax treaties; roadmap may need to address both. - Prioritization: Prioritization and sequencing depend on significance of identified risks; establishing the basic right to tax MNE earnings from economic activity within the jurisdiction is often an immediate priority. - Timing caution: Administrative capacity constraints (staff, technology, data) may advise postponing complex legal tools (for example, APAs and GAARs) until administration is capable of competent deployment. - International forum obligations: - domestic law must allow collection and exchange of certain information and protect confidentiality and security - Inclusive Framework participation requires laws supporting four minimum standards including removing/modifying preferential tax regimes, sharing certain tax ruling information, preventing treaty abuse, and collecting/sharing transfer pricing documentation - Treaty management: Bilateral tax treaties may need periodic monitoring and modification; multilateral instruments can simplify treaty modification where appropriate. ### Organization structure and governance - Need for enhancements: Implementation of international provisions often requires organizational enhancements: structures for international relations, procedures/systems maintenance, and systematic knowledge/skills development. - No single template: Structure depends on size, maturity, and experience. - Common responsibilities of an international tax unit: - environmental scanning and systemic risk analysis - developing and monitoring international tax CRM, CIS, and CIPs - technical specialization - quality control and governance - Collaboration: Where an international tax unit is separate from operational areas (for example, large taxpayer office (LTO)), strong collaboration is required to develop and apply provisions, processes, and procedures across the administration. - Integration: Integration of international tax administration within the tax administration’s processes and functional segments is critical; engagement with other institutions (administrative tribunals, courts) is important for resolving international tax matters. *IMF | How to Notes NOTE/2025/008 — Box 1. Responsibilities of an International Tax Unit* ### Purpose and core responsibilities (operational) - Lead international tax compliance risk management and support implementation of Compliance Improvement Plans (CIPs). - Develop, implement, and monitor the international tax compliance improvement strategy and CIPs. - Establish a center of expertise on international tax law and practice, potentially including acting as a Competent Authority and managing international dispute resolution. - Implement existing and new international tax provisions. - Ensure compliance with the requirements of international cooperative forums. - Inform tax policy decisions. ### Roles and operational functions - Technical leadership: - Develop specializations in various areas of international laws. - Strengthen (as required) the international legal framework. - Issue advance rulings and monitor consistent application of rulings and laws. - Build and maintain a strategic data set including cross-border information sharing, such as through exchange of information and country-by-country reporting. - Direct research, analysis, and profiling, and use advanced analytics tools. - Supporting capability development: - Develop and implement standard operating procedures for staff working in areas of international taxation. - Identify capability development requirements (training, technical assistance, forms, manuals, and technology solutions) and implement a capability framework across international taxation areas. - Promote effective collaboration and coordination between the International Tax Unit and other areas involved in managing taxpayers with international dealings as well as external institutions. - Manage compliance with requirements of international cooperative forums. - Overseeing strategy and planning: - Commission and maintain the international tax compliance improvement strategy, and oversee the development of the CIPs as part of the annual business planning cycle. - Negotiate agreement of the structured compliance improvement activities, outlined in key planning documents, with relevant outcome-based performance objectives for final approval by the executive team. - Monitor progress in implementing CIPs and initiate corrective action. ### Focus on large taxpayers and MNEs - Large enterprises: - Represent an extremely important share of a country’s revenues. - Are generally well resourced and have in-house accounting and access to highly qualified professionals. - Often use sophisticated fiscal measures and have complex international dealings and relationships. - Are not very numerous, enabling close management with appropriate staff and systems capability. - MNEs: - Are an important and often expanding sub-category within the large taxpayer population. - Require even higher levels of specialized human and technological resources. - May be managed within the LTO structure and may involve establishment of specialized teams. ### Resource considerations and sequencing - Potential additional resource needs: - Funding for additional staff - Training - Infrastructure improvements such as enhanced IT systems - More storage as better data are obtained for risk assessment - Systems to ensure data security and confidentiality - Exchange of information: Participation in exchange of information requires meeting specific requirements established by international cooperation agreements prior to any exchange of taxpayer information. - Recommended approach: - Undertake an assessment of resource needs, taking into consideration the results of the FITAS assessment. - Prioritize and sequence actions to strengthen administrative capacity. - Cost various activities to determine whether resources can be reallocated internally or whether new funding is required. - Develop a business case for additional funding when needs cannot be met from existing resources. - Communicate early and regularly with the MOF and Government to explain changes and benefits (additional tax revenues, increased compliance, modernized tax administration). - Secure sustained political commitment; building capacity is a multiple-year effort and benefits will take time to materialize. ### FITAS framework — structure and key assessment dimensions (high-level) - Six categories: (1) People; (2) Systems and CRM; (3) Tools; (4) Data; (5) Legal framework; (6) Organization Structure and Governance. - People (examples of elements and progression) - P1 Analytics capability: from no assigned staff and limited skills to specialist full-time analytics teams with advanced skills such as design of risk algorithms and use of Big Data. - P2 International audit and dispute resolution experience: from few selected cases and little experience to multidisciplinary teams handling major cases and skilled dispute resolution. - P3 Resource availability: from occasional assignment of resources to adequate resources allocated to action all higher risk international tax issues with workforce planning. - P4 International tax specialist training: from no manuals/training to comprehensive programs, advanced training, and annual training on code of conduct relating to data access. - P5 Treaty application and negotiation: from no strategy and little negotiation experience to skilled competent authority and well-developed case-level information sharing including automatic exchange. - Systems and compliance risk management (examples) - S1 Support for international risk assessment in case work: from risks found after case work begins to automatically generated case profiles including risks, corporate structures, and related party dealings. - S2 International risk markers and case selection algorithms: from manual/non-risk-based selection to automated, tailored risk markers and regular updates. - S3 Exchange of information: from limited or manual exchanges to electronic exchange using standard technical formats, secured storage, and tracking/reporting. - S4 Data onboarding and bulk data analysis: from stand-alone devices and paper to data integration hubs, automated analytics platforms, and protections for confidentiality and audit trails. - S5 Data storage capacity: from limited repositories to a central national taxpayer database maintained and updated daily with multi-year files. - S6 Compliance risk management: from no CRM processes to CRM with operational analytics supporting cross-functional CIPs and feedback loops to improve processes. - Tools - T1 International tax CRM, compliance improvement strategies and plans: from ad-hoc local management to an annual international tax CRM and CIS overseen by the international tax unit with detailed CIPs. - T2 Policies and procedures: from no SOPs to comprehensive, nationally deployed SOPs with automated reporting of CIS performance. - T3 Audit tools: from general large business audit approaches to specialized audit processes and availability of international specialists advising audit teams. - T4 International relations and agreements: from no treaty strategy to a prioritized, sequenced treaty program with extensively trained negotiators and tailored treaty terms. - T5 International cooperative forums: from limited involvement to formal decisions about forum participation and organizational arrangements to manage commitments. - Data - D1 Access to data: from paper and uncentralized data to consolidated national datasets updated daily with routine bulk data exchange from other agencies. - D2 Information security and privacy: from rudimentary safeguards to documented procedures, tiered access, access logs, and regular checks. - D3 Data to support CRM: from limited case-level data to comprehensive MNE reporting and sufficient third-party and exchanged data to quantify risks at strategic, operational, and tactical levels. - D4 Managing data related to cooperative forum membership: from non-membership to ratified membership with data gathering powers and management arrangements to exploit received data. - Legislative framework - L1 Domestic laws: from no/limited international provisions to comprehensive anti-avoidance rules, regular legal review, and communication mechanisms. - L2 Network of international agreements: from limited treaties/TIEAs to a current, prioritized treaty network consistent with country strategy and risk profile. - L3 Domestic information reporting by taxpayers: from generic reporting and limited bulk third-party reporting to laws authorizing detailed reporting by taxpayers and third parties and tax law overriding secrecy. - L4 Information security and privacy: from narrow legal provisions to domestic standards and treaties protecting exchanged information. - L5 Legislation required to participate in forums: from limited participation and case-by-case data gathering to instruments authorizing collection and exchange with confidentiality protections in receiving jurisdictions. - Organization structure and governance - O1 Organization structure: from international issues handled by originating area to establishment of an international tax unit overseeing laws, policies, SOPs, and bilateral agreements; MAPs and graduated administrative/judicial review available. - O2 Resources assigned: from no/little resources to dedicated resources managing international responsibilities and supporting transfer pricing reporting. - O3 Governance and monitoring: from no quality control or KPIs to formal quality control, comprehensive KPIs, regular management reporting within strategic context, and ROI calculations comparing relative risks. - Rating scale note: “E” = Emerging, “P” = Progressing, “GP” = Good Practice. Administrations should aim for each element to reach Good Practice over time. *Source: IMF staff.* ### Box 1. Responsibilities of an International Tax Unit ................................................................... ### Box 1. Responsibilities of an International Tax Unit ### General description and purpose - The Framework for International Tax Administration Strengthening (FITAS) is an assessment tool to evaluate a tax administration’s capacity to manage international tax risks and to develop prioritized, sequenced action plans to address identified weaknesses. - The assessment tool evaluates six FITAS categories against a three-stage continuum representing progress toward international good practice: - (1) emerging - (2) progressing - (3) established good practice - For each FITAS category and element, questions guide reflection and rating (see Table 2). Consolidated judgments are required when multiple questions apply to an element; category ratings derive from component element ratings using assessor judgment rather than simple averaging. - Table 3 presents a summary assessment format suited for senior management to encapsulate the administration’s consolidated status. - Primary outcomes: identification of administrative and policy capacity gaps, inputs for an overarching strategic roadmap, prioritized action plans, technical assistance priorities, and engagement with partner agencies. ### How to rate and assess - Development partners (for example, the IMF) are positioned to compare international good practice with a jurisdiction’s laws and practices and to provide quality assurance. - Administrations may undertake self-assessments, but these lack breadth; a quality assurance process by experts with international tax experience is recommended. - The assessment tool is generic and can be tailored where development partner assistance is available (including tailoring to legal frameworks). - Assessors must apply professional judgment; some elements may carry greater importance and a weak critical element may require rating the entire category at the lower level. - Avoid over-rating; where doubt exists, choose the lower rating to prevent masking development needs. Document the rationale behind each rating. - A multidisciplinary subject-matter expert team should reach agreed views for each element; examples of experts include legal, international division, audit, and human resources staff. - External stakeholders (Ministry of Finance, courts, professional associations) may provide useful perspectives and should be consulted where possible. - After quality review, findings are typically submitted to the Management Committee for approval; the Management Committee provides strategic direction and appoints officials to lead implementation. ### People - Increasing need to professionalize the tax administration workforce, particularly in international tax, due to growing complexity, technological advances, and diplomatic/economic relations. - International tax units typically need multidisciplinary expertise: data scientists, economists, IT experts, analysts, international tax law experts, and auditors. - Key human resource priorities: - competency-based recruitment and workforce planning - recruitment of staff with required qualifications (including foreign language skills) and personal qualities - competency definitions linked to job types to guide recruitment and promotion - competency-based recruitment applied as pilot/trial in international tax where organization-wide rollout is not immediately feasible - Training and development: - systematic ongoing approach combining formal training, coaching, and on-the-job development - emerging systems may require external technical assistance and practical exposure - progressing and established systems use organized training delivered by highly skilled practitioners and assess performance by field results ### Systems and Compliance Risk Management (CRM) - Effective CRM requires access to modern IT systems and a wide range of data from diverse sources; discussion focuses on systems support for international tax CRM for MNEs. - Systems requirements cover data onboarding, storage, analysis, exchange, and security across three analytical levels: - systemic: identify, quantify, prioritize systemic risks using all national data holdings about MNEs (structured and unstructured) - operational: develop and implement Compliance Improvement Plans (CIPs) for key taxpayer segments, industry sectors, and focus areas; models for risk analysis and case selection should target treatments commensurate with risk - tactical: risk-based case selection, taxpayer profiling, pattern detection, visualization, and social network analysis to detect related-party dealings - Capability by system maturity: - established system: unified electronic access to all relevant data, a range of profiling tools, visualization, social network analysis - progressing system: some profiling capacity with fragmented data and basic software; limited sophisticated tools - emerging system: largely manual processes and limited data - Maximizing data use and modern technologies supports better service delivery, control over tax evasion, and transparency; revenue gains from better international tax risk management can help build IT business cases. ### Tools - Core tools to strengthen international tax capacity: - an international tax CRM approach leading to a Compliance Improvement Strategy (CIS) and operational CIPs - a strategic roadmap and sequenced action plans aligned with FITAS assessment outcomes and international tax CRM priorities - treaty networks (where appropriate) to provide certainty and prevent double taxation—terms must support both parties’ interests - participation in international cooperative forums assessed against membership benefits (access to data, data exchange, support, training) and costs/obligations - Standard Operating Procedures (SOPs) and procedural manuals to support consistency and quality; specialization of staff where feasible - The CRM approach should be jurisdiction-specific, accounting for MNE presence, legal framework, treaty network, and organizational capacity. ### Data - Addressing data availability and management shortcomings is a priority; absence of a sound data set and data management framework limits ability to identify and manage international tax risks. - Data sources may include: - taxpayer filings and reporting (withholding tax returns, financial institution reporting) - audit and taxpayer interaction records - third-party/regulator data (financial services regulator, stock exchange) - environmental scanning and research - international data sharing - Data required across analytical levels: - systemic, operational, and tactical analyses require both bulk data and individual case-level data, and internal and external sources - Data strategy and roadmap should: - identify what data are needed and what can be legally obtained - prioritize sourcing data to administer the current legal framework and mitigate priority risks - manage and protect data for international cooperative forum participation - plan for additional data needs tied to legal framework strengthening - Legal aspects: - laws may be required to authorize collection/access to prescribed bulk banking data, international funds movement records, and prescribed MNE reporting - law should ideally allow specification of formats and transmission methods and permit updates without continuous amendments - Systems and people capacities must be aligned with the data strategy (systems for use and confidentiality; people with skills to manage, analyze, interpret data). ### Legal framework - Law reform may be required early, recognizing long lead times; legal reform is necessary but only effective when supported by other administrative features. - Roadmap and action plan for legal reform should be informed by analysis of the jurisdiction’s international risk profile and government policy objectives. - Legal structure includes both domestic laws and tax treaties; roadmap may need to address both. - Prioritization and sequencing depend on significance of identified risks; establishing the basic right to tax MNE earnings from economic activity within the jurisdiction is often an immediate priority. - Specific measures may be needed to limit profit-shifting; tax policy issues typically involve the Ministry of Finance. - Administrative capacity constraints (staff, technology, data) may advise postponing complex legal tools (for example, APAs and GAARs) until administration is capable of competent deployment. - Participation in international forums (for example, Global Forum on Transparency and Exchange of Information for Tax Purposes; jurisdictions that have joined the Inclusive Framework) imposes legal obligations: - domestic law must allow collection and exchange of certain information and protect confidentiality and security - Inclusive Framework participation requires laws supporting four minimum standards including removing/modifying preferential tax regimes, sharing certain tax ruling information, preventing treaty abuse, and collecting/sharing transfer pricing documentation - Bilateral tax treaties may need periodic monitoring and modification; multilateral instruments can simplify treaty modification where appropriate. ### Organization structure and governance - Implementation of international provisions often requires organizational enhancements: structures for international relations, procedures/systems maintenance, and systematic knowledge/skills development. - No single organizational template; structure depends on size, maturity, and experience. Common responsibilities of an international tax unit include: - environmental scanning and systemic risk analysis - developing and monitoring international tax CRM, CIS, and CIPs - technical specialization - quality control and governance - Where an international tax unit is separate from operational areas (for example, large taxpayer office (LTO)), strong collaboration is required to develop and apply provisions, processes, and procedures across the administration. - Integration of international tax administration within the tax administration’s processes and functional segments is critical; engagement with other institutions (administrative tribunals, courts) is important for resolving international tax matters. *IMF | How to Notes NOTE/2025/008 — Box 1. Responsibilities of an International Tax Unit* ### Box 1. Responsibilities of an International Tax Unit ### Box 1. Responsibilities of an International Tax Unit ### Purpose and core responsibilities - Lead international tax compliance risk management and support implementation of compliance improvement plans (CIPs). - Develop, implement, and monitor the international tax compliance improvement strategy and CIPs. - Establish a center of expertise on international tax law and practice, potentially including acting as a Competent Authority and managing international dispute resolution. - Implement existing and new international tax provisions. - Ensure compliance with the requirements of international cooperative forums. - Inform tax policy decisions. ### Roles and operational functions - Providing technical leadership - Develop specializations in various areas of international laws. - Strengthen (as required) the international legal framework. - Issue advance rulings and monitor consistent application of rulings and laws. - Build and maintain a strategic data set including cross-border information sharing, such as through exchange of information and country-by-country reporting. - Direct research, analysis, and profiling, and use advanced analytics tools. - Supporting capability development - Develop and implement standard operating procedures for staff working in areas of international taxation. - Identify capability development requirements (training, technical assistance, forms, manuals, and technology solutions) and implement a capability framework across international taxation areas. - Promote effective collaboration and coordination between the International Tax Unit and other areas involved in managing taxpayers with international dealings as well as external institutions. - Manage compliance with requirements of international cooperative forums. - Overseeing strategy and planning - Commission and maintain the international tax compliance improvement strategy, and oversee the development of the CIPs as part of the annual business planning cycle. - Negotiate agreement of the structured compliance improvement activities, outlined in key planning documents, with relevant outcome-based performance objectives for final approval by the executive team. - Monitor progress in implementing CIPs and initiate corrective action. ### Focus on large taxpayers and MNEs - Large enterprises: - Represent an extremely important share of a country’s revenues. - Are generally well resourced and have in-house accounting and access to highly qualified professionals. - Often use sophisticated fiscal measures and have complex international dealings and relationships. - Are not very numerous, enabling close management with appropriate staff and systems capability. - MNEs: - Are an important and often expanding sub-category within the large taxpayer population. - Require even higher levels of specialized human and technological resources. - May be managed within the LTO structure and may involve establishment of specialized teams. ### Resource considerations and sequencing - Strengthening administration of international tax risks may require additional resources including: - Funding for additional staff. - Training. - Infrastructure improvements such as enhanced IT systems. - More storage as better data are obtained for risk assessment. - Systems to ensure data security and confidentiality. - Participation in exchange of information requires meeting specific requirements established by international cooperation agreements prior to any exchange of taxpayer information. - Recommended approach: - Undertake an assessment of resource needs, taking into consideration the results of the FITAS assessment. - Prioritize and sequence actions to strengthen administrative capacity. - Cost various activities to determine whether resources can be reallocated internally or whether new funding is required. - Develop a business case for additional funding when needs cannot be met from existing resources. - Communicate early and regularly with the MOF and Government to explain changes and benefits (additional tax revenues, increased compliance, modernized tax administration). - Secure sustained political commitment; building capacity is a multiple-year effort and benefits will take time to materialize. ### FITAS framework — structure and key assessment dimensions (high-level) - People (examples of elements and progression) - P1 Analytics capability: from no assigned staff and limited skills to specialist full-time analytics teams with advanced skills such as design of risk algorithms and use of Big Data. - P2 International audit and dispute resolution experience: from few selected cases and little experience to multidisciplinary teams handling major cases and skilled dispute resolution. - P3 Resource availability: from occasional assignment of resources to adequate resources allocated to action all higher risk international tax issues with workforce planning. - P4 International tax specialist training: from no manuals/training to comprehensive programs, advanced training, and annual training on code of conduct relating to data access. - P5 Treaty application and negotiation: from no strategy and little negotiation experience to skilled competent authority and well-developed case-level information sharing including automatic exchange. - Systems and compliance risk management (examples) - S1 Support for international risk assessment in case work: from risks found after case work begins to automatically generated case profiles including risks, corporate structures, and related party dealings. - S2 International risk markers and case selection algorithms: from manual/non-risk-based selection to automated, tailored risk markers and regular updates. - S3 Exchange of information: from limited or manual exchanges to electronic exchange using standard technical formats, secured storage, and tracking/reporting. - S4 Data onboarding and bulk data analysis: from stand-alone devices and paper to data integration hubs, automated analytics platforms, and protections for confidentiality and audit trails. - S5 Data storage capacity: from limited repositories to a central national taxpayer database maintained and updated daily with multi-year files. - S6 Compliance risk management: from no CRM processes to CRM with operational analytics supporting cross-functional CIPs and feedback loops to improve processes. - Tools - T1 International tax CRM, compliance improvement strategies and plans: from ad-hoc local management to an annual international tax CRM and CIS overseen by the international tax unit with detailed CIPs. - T2 Policies and procedures: from no SOPs to comprehensive, nationally deployed SOPs with automated reporting of CIS performance. - T3 Audit tools: from general large business audit approaches to specialized audit processes and availability of international specialists advising audit teams. - T4 International relations and agreements: from no treaty strategy to a prioritized, sequenced treaty program with extensively trained negotiators and tailored treaty terms. - T5 International cooperative forums: from limited involvement to formal decisions about forum participation and organizational arrangements to manage commitments. - Data - D1 Access to data: from paper and uncentralized data to consolidated national datasets updated daily with routine bulk data exchange from other agencies. - D2 Information security and privacy: from rudimentary safeguards to documented procedures, tiered access, access logs, and regular checks. - D3 Data to support CRM: from limited case-level data to comprehensive MNE reporting and sufficient third-party and exchanged data to quantify risks at strategic, operational, and tactical levels. - D4 Managing data related to cooperative forum membership: from non-membership to ratified membership with data gathering powers and management arrangements to exploit received data. - Legislative framework - L1 Domestic laws: from no/limited international provisions to comprehensive anti-avoidance rules, regular legal review, and communication mechanisms. - L2 Network of international agreements: from limited treaties/TIEAs to a current, prioritized treaty network consistent with country strategy and risk profile. - L3 Domestic information reporting by taxpayers: from generic reporting and limited bulk third-party reporting to laws authorizing detailed reporting by taxpayers and third parties and tax law overriding secrecy. - L4 Information security and privacy: from narrow legal provisions to domestic standards and treaties protecting exchanged information. - L5 Legislation required to participate in forums: from limited participation and case-by-case data gathering to instruments authorizing collection and exchange with confidentiality protections in receiving jurisdictions. - Organization structure and governance - O1 Organization structure: from international issues handled by originating area to establishment of an international tax unit overseeing laws, policies, SOPs, and bilateral agreements; MAPs and graduated administrative/judicial review available. - O2 Resources assigned: from no/little resources to dedicated resources managing international responsibilities and supporting transfer pricing reporting. - O3 Governance and monitoring: from no quality control or KPIs to formal quality control, comprehensive KPIs, regular management reporting within strategic context, and ROI calculations comparing relative risks. *Source: IMF staff.* ### 1. The FITAS is designed to evaluate a tax administration’s progress in achieving good practice related to the capacity ### 1. The FITAS is designed to evaluate a tax administration’s progress in achieving good practice related to the capacity to manage international tax risks. ### Overview - Purpose: Evaluate a tax administration’s progress toward good practice in capacity to manage international tax risks. - Structure: The FITAS has six categories and elements within each category; element ratings roll up to category ratings. - Rating scale: Emerging (E), Progressing (P), Good Practice (GP). - Goal: Reach Good Practice; timeframe may take years depending on current status. - BEPS scope note: The assessment tool does not currently include considerations relevant to BEPS Action 1 (pillars 1 and 2); these may be added later. ### Assessment structure and scoring guidance - Six categories: - (1) People - (2) Systems and CRM - (3) Tools - (4) Data - (5) Legal framework - (6) Organization Structure and Governance - Process: - Each question in the assessment tool maps to an element in FITAS. - Responses to each question should be documented in the assessment tool. - Element-level ratings are selected from {E, P, GP}; overall category rating derived from element ratings. - If responses map to multiple ratings, the scoring team must determine an overall score based on combined responses. - When in doubt, choose the lower rating to avoid underestimating capacity development needs. - Inputs: Complete assessment with subject matter experts (e.g., IT specialist for systems elements, business owners). ### Practical guidance and adjustments - Questionnaire is broad and should be adjusted for a tax administration’s legal framework and participation in international cooperative forums. - External expertise (development partners such as the IMF) can identify additional issues to enhance the tool for a specific country review. - The assessment tool does not reflect any particular jurisdiction’s specific legislative framework; additional jurisdiction-specific questions may be required if used as a self-assessment. If IMF assists, legislative review and additional questions will be added as required. ### People (category highlights and elements) - Elements and question focus: - P1—Analytics capability: expertise and specialization in data analytics and profiling tools. - P2—International audit experience: auditors’ experience, use of risk-based audit approach, mentoring/coaching, specialization, team composition, types of audits. - P3—Resource availability and adequacy: processes to determine resource needs (Audit, EOI, MAP, APA, CRM, policies and procedures), workforce planning, retention and succession planning. - P4—International tax specialist training: formal training programs, dissemination of course content, training coordination, training manuals referencing court decisions. - P5—Treaty application and negotiation: inclusion of audit staff in treaty negotiation team and degree of experience. - Assessment items include specific questions about: - Use of mentoring/coaching, team vs single-auditor handling of complex audits, formal training manuals, and workforce planning. ### Systems and CRM (category highlights and elements) - Elements and question focus: - S1—Support for international risk assessment in case work: availability and consolidation of information for auditors and decision rules for addressing identified risk. - S2—International risk markers and case selection algorithms: automated risk assessment processes and industry-specific international risk filters. - S3—Exchange of Information (EOI): how information received under exchange agreements is held, system isolation or integration, and format usability. - S4—Data onboarding and bulk data analysis: central database capability, access to data analysis software, and processes for cleaning heterogeneous data. - S5—Data storage capacity: storage limitations and searchability. - S6—Compliance risk management: identification of compliance risks, use of data from other countries, global trend analysis, feedback loop from audit results, validation of industry classification codes, dedicated CRM capability across registration/filing/reporting/payment. - Specific operational considerations: feedback loops from audit to file selection; international tax strategy considerations (T1 referenced in tool). ### Tools (category highlights and elements) - Elements and question focus: - T1—International tax CRM: presence of compliance improvement plans (CIPs), management information/statistics for senior management on international tax compliance. - T2—Policies and procedures: EOI policies and procedures, MAP process, use of non-audit treatment strategies (education, assisted compliance), audit procedures manual, risk assessment and audit policy availability, BEPS guidance for taxpayers. - T3—Audit tools: industry profiles, issue-specific reference materials, access to audit software, legal databases, specialist technical advice, benchmarking/comparables. - T4—International relations: procedures to ensure treaty language meets international standards (BEPS Action 6), treaty policy and decisions on negotiating TIEAs. - T5—International cooperative forums: analysis of cooperative forums and benefits for managing international tax risks. ### Data and privacy (category highlights and elements) - Elements and question focus: - D1—Access to data: agreements to receive tax-relevant data from external parties (banking, customs, patent office, companies register), comprehensive taxpayer view across registration/filing/reporting/payment, transaction information for offshore large value transfers, availability of government-level company database. - D2—Information security: safeguards to prevent misuse and protect confidentiality per international requirements (access/password protection/audit trails/backups). - D3—Data to support CRM: what information is collected and stored, documentation of ultimate ownership and identity, raw data extractability (excel/CSV). - D4—Managing data related to international cooperative forum membership: processes to ensure received data can be fully used for matching and risk assessment, and procedures for determining which rulings must be shared under BEPS Action 5. - Operational data questions include extractability, ownership documentation, and data cleaning/matching processes. ### Legislative framework (category highlights and elements) - Elements and question focus: - L1—Domestic laws: access to taxpayers’ business records and information, legal provisions to compel information, taxing rights and anti-avoidance provisions, graduated penalty regimes, disclosure requirements (corporate group description, detailed income position, related party transactions, master and local files), statute-barred period for reassessments, authority for EOI (BEPS Action 5), timeframes for resolving objections (MAP). - L2—Network of bilateral agreements: CBC reporting compulsion and use; conformity of bilateral agreements to recommended model language; protection of country interests in bilateral agreements. - L3—Domestic information reporting by taxpayers: authority to require additional schedules to tax returns for related party transactions, format and transmission prescriptions. - L4—Information security: information security requirements in domestic law and practice. - L5—Legislation required to participate in international cooperative forums: written procedures for implementing CBC and confidentiality protections preventing release under other domestic laws (e.g., freedom of information). - Specific legislative items queried include statute-barred period sufficiency for international audits and legal authority to prescribe reporting formats. ### Organization structure and governance (category highlights and elements) - Elements and question focus: - O1—Organization structure to manage international tax matters: centralization of staff working on international transactions, coordination across risk/audit/EOI/APA/dispute resolution/MAP, existence of independent recourse mechanism. - O2—Resources assigned: dedicated units for EOI/CBC, MAP/APA unit if warranted, segregation of duties considerations, resource dedication relative to international tax risk. - O3—Governance and monitoring: KPIs for international tax compliance programs, quality control mechanisms to prevent corruption and ensure audit quality and timeliness, implementation progress for BEPS minimum standards—Actions 5, 6, 13, and 14, management reporting processes (Risk Committee frequency), auditor time tracking, tracking of international tax reassessments through ultimate resolution. - Governance queries include KPIs, quality control, BEPS minimum standards implementation, and reporting cadence. ### Framework for assessment results (Table 3 summary) - Table 3 maps each category to element codes and allows assignment of ratings E, P, GP for each element. - People elements: P1, P2, P3, P4, P5. - Systems and CRM elements: S1, S2, S3, S4, S5, S6. - Tools elements: T1, T2, T3, T4, T5. - Data elements: D1, D2, D3, D4. - Legislative framework elements: L1, L2, L3, L4, L5. - Organization structure and governance elements: O1, O2, O3. - Note on scale: “E” = Emerging, “P” = Progressing, “GP” = Good Practice. Administrations should aim for each element to reach Good Practice over time. *Source: IMF staff.* --- _Source: https://www.imf.org/-/media/files/publications/howtonotes/2025/english/htnea2025008.pdf_