In recent years, tax governance has become a central topic in discussions among businesses, professionals and tax authorities. The growing complexity of the regulatory framework, the rise in cross-border transactions and the ongoing digitalization of control mechanisms have required companies to implement tools that ensure compliance with applicable regulations while transparently evidencing the strength of their internal processes. In this context, the Tax Control Framework (TCF) has emerged as one of the most advanced models for tax risk management, playing an increasingly prominent role within the Italian regulatory framework.
The Tax Control Framework may be defined as an integrated and structured system of procedures, controls and responsibilities aimed at managing the full spectrum of a company’s tax processes. It is not simply a collection of formal compliance requirements, but an internal governance framework that enables the company to ensure that tax determination, payment and related documentation are performed accurately, consistently and in a verifiable manner. At its core, the Framework reflects a shift from a reactive approach, characteristic of traditional control systems, to a proactive and ongoing management of risk.
The Italian legislator has recognized the importance of this instrument within the Cooperative Compliance Regime, established by Legislative Decree No. 128/2015 and aimed at large-scale taxpayers. Admission to the regime requires the implementation of an appropriate TCF, suitable to provide the Tax Authorities with a clear and transparent view of the robustness of internal processes and the effectiveness of risk oversight. The cooperative compliance model relies on a transparent and continuous relationship between the company and the Tax Authorities, making the quality of the Tax Control Framework a key prerequisite for building a constructive, trust-based dialogue.
From a substantive standpoint, an effective TCF rests on several key components. The first relates to governance, which requires a clear allocation of internal responsibilities and the direct involvement of the governing body in shaping the company’s tax strategy. Another key pillar lies in the company’s ability to identify, evaluate and monitor tax risks throughout all relevant processes, while ensuring full traceability of activities carried out and decisions made. This also entails the formalization of operating procedures, the implementation of internal controls aligned with the company’s organizational structure and the periodic review of the system’s effectiveness, including through the involvement of the internal audit function.
The technological dimension is equally important. Advancements in information systems and the increasing availability of tax data management tools allow the TCF to be integrated with digital solutions that improve data reliability, support timely analysis and enable ongoing process monitoring. A solid IT framework is essential to sustain a modern tax governance model consistent with the expectations of the Tax Authorities.
Adopting a Tax Control Framework provides benefits that go beyond mere compliance. Companies implementing a structured tax risk management system benefit from improved operational efficiency, higher-quality internal information and more effective stakeholder relationship management. In an environment where tax transparency is becoming increasingly relevant from a reputational standpoint, the TCF emerges as a distinctive element that can strengthen a company’s market credibility.
Nohema assists companies in the design, implementation and assessment of the Tax Control Framework, adopting an approach aligned with the organization’s actual structure and fully integrated into its internal control system. Our approach starts with mapping tax processes and identifying risk areas, progresses through the definition of operating procedures and key controls, and concludes with the implementation of monitoring tools designed to ensure ongoing reliability and sustainability over time. The aim is to develop an efficient and sustainable model fully aligned with the requirements of the Cooperative Compliance Regime and international best practices.
The benefits for the company are manifold: increased assurance in the application of tax rules, a concrete reduction of the risk of errors and disputes, enhanced quality of internal information flows, stronger managerial decision-making and a more transparent and structured relationship with the Tax Authorities. In addition, a solid tax governance framework provides a competitive reputational advantage, as it is increasingly regarded as a hallmark of reliability and integrity in the marketplace.