Dispute resolution
Enhanced taxpayer cooperation
through the mediation process
Georgian dispute resolution initiatives
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•
•
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Binding rulings.
Tax settlements.
Chapter on taxpayer rights in Tax Code.
Tax Ombudsman.
Mediation (administrative).
What is mediation?
• Alternative dispute resolution.
• GRS mediator seeks to achieve an acceptable
settlement between positions of auditor and
taxpayer.
– Not an independent tribunal.
– Taxpayer may discuss issues with experienced GRS
personnel before an assessment is made.
– Potentially avoids need for appeals and formal
disputes resolution process.
Advantages of mediation
• Reasonable forum for discussing taxpayer’s opinions,
arguments and evidence.
• Quality and consistency:
– The GRS mediation role may result in the development of a
new approach (manual) to the situation under dispute.
• Flexible process:
– GRS may suggest other procedures for dispute resolution
(e.g., tax agreement).
• Confidentiality on the basis of the parties’ agreement.
• Deepening volunteering and mutual trust.
Initiating mediation process
• The auditor provides the taxpayer with a
written Audit Project Act, reflecting issues
identified by the auditor for assessment.
– Taxpayer must submit written position to the GRS
Mediation Board Office within five (5) working
days if it wants to pursue mediation.
– If no written response is submitted, a Tax Audit
Act (assessment) will proceed.
Mediation Board
• Mediation Board meeting, composed of the Senior
management of the Revenue Service, Headed by the
Director of the Revenue Service, in person or the Deputy
Director and the senior Tax Audit Managers, is conducted
with participation of:
– The taxpayer and/or its representative.
– Other persons authorized by the taxpayer.
• Following the initial meeting, the Mediation Board may:
– Recommend that further information be obtained and that the
Audit Department then review its position; or
– Fully accept, partially accept, or reject the taxpayer’s position.
Accepting/rejecting taxpayer’s position
• Once Board’s final position is determined:
– The amounts in the Project Act will be recalculated (if
required) to reflect the Board’s recommendations.
– A Tax Audit Act (assessment) will be concluded.
– An Order will be issued.
– The Tax Claim will be sent to the taxpayer.
• If the GRS issues a Tax Audit Act, the taxpayer has
the right to appeal the assessment under Part XIV
of Tax Code.
Further information
• If the Board recommends that further
information be obtained:
– Case discussion will be suspended (postponed).
– Audit Department will request information from
relevant persons before presenting its revised
conclusion to the Mediation Board office.
– Another meeting will be held to make final
assessment (recommendation/reference to the
Project
– Draft Audit Report).
• Not satisfied
• Partially
satisfied
• Fully satisfied
5 days
Audit
Department
Service
Department
Prevention
Department
5 days
Department of
Disputes
•
Recommendatio
n on tax
settlement
Total 6888 appeals were
reviewed in 2011
Total 8455 appeals were
reviewed in 2012 (8 months)
The portion of appeals reviewed at the Mediation Council
(established on April 1)
Appeals
reviewed by
the Mediation
Council
Appeals
reviewed by
the Mediation
Council
Appeals
reviewed
without the
Mediation
Council
5510,
79%
1378,
21%
1524,
16%
Appeals
reviewed
without the
Mediation
Council
7942,
84%
Structure of decisions made at the department of disputes in
2012
Total 9466 appeals
2168
1011
5445
842
Not satisfied
22%
Not discussed
9%
Satisfied
11%
Partially satisfied
58%
757 Total 2568 appeals
580
562
2011
2012
269
227
173
Not satisfied
Partially satisfied
Fully satisfied
Portion of Mediation Council in the dynamics of appeals reviewed within the Revenue Service
350
320
2011
300
2012
258
250
200
137
129
100
160
70
16
152
271
176
153
116
102
50
0
194
191
150
276
74
107
General Trend
February
December
November
October
9%
9%
August
July
June
May
April
March
January
August
30% 26% 33% 35% 69% 52% 6% 20% 14% 30% 29% 35% 76% 73% 74% 74% 76% 76% 73% 71%
July
19% 19% 14% 11% 13% 8%
June
12% 8% 10% 13% 28% 22% 3%
May
11% 10% 21% 65% 60% 66% 67% 65% 65% 61% 57%
April
January
Partially satisfied
18% 18% 23% 22% 41% 30% 3% 11% 5%
March
Decision
Was not satisfied
70% 74% 67% 65% 31% 48% 94% 80% 86% 70% 71% 66% 24% 27% 26% 26% 24% 24% 27% 29%
Fully satisfied
September
8455 appeals, 2012
Trend
February
Out of 6888 appeals in 2011: (Mediation Council exists since April
1)
7% 11% 11% 12% 14%
Mediation
Out of 1378 appeals in 2011: (Mediation Council exists since April
1)
18% 18% 23% 22% 41%
11% 8% 10% 13% 28%
7%
5%
August
July
May
April
March
January
June
February
December
November
October
September
August
July
June
May
April
January
Fully satisfied
end
March
Decision
71% 74% 67% 65% 31% 28% 41% 38% 40% 33% 40% 29% 24% 26% 19% 12% 4%
Partially satisfied
Was not satisfied
February
1524 appeals, 2012
9%
41% 32% 44% 28% 37% 37% 56% 33% 44% 31% 21% 19% 68% 41% 33%
31% 27% 18% 32% 30% 23% 15% 43% 30% 50% 67% 77% 25% 54% 58%
Reform subject:
Taxpayer will be able to participate in the Mediation Council meeting
online
Reform goal:
To help taxpayers save time and monetary resources