If asked spontaneously, most people will probably answer the question of what they expect from a tax consultant somewhere along the line of: «That he/she helps me to pay as little tax as possible.» The answer is understandable and logical as well, one would think. But is it also right, or is there more to tax consultancy?
«Ignorance of tax laws does not release you from the obligation to pay taxes. But knowledge often does.»
Meyer Amschel, Baron Rotschild, German merchant and banker
(* 23.02.1744 - † 19.09.1812)
The word «consultant» already says a lot about the task and function of this professional designation. Consultants help people find their way around a specific topic because it is too complicated for non-experts and they could suffer disadvantages without the support of a consultant. The consultant thus helps to obtain clarity about the questions that shall be answered, so that the non-expert understands what the question entails and what possible solutions are available as an answer.
However, this is not so easy at times, because tax law is a very complex area of law, which rarely provides a precise and unambiguous answer to tax matters. Already Otto von Bismarck is said to have stated: «Every new tax has something surprisingly uncomfortable for those who are to pay it or even only interpret it». The complexity of tax law is due to the large number of different parties and laws that have to be observed on the one hand, and to the changes and reforms that are currently taking place in tax law on the other. Tax law is also where law and business administration meet. The legal norms are linked to accounting rules and principles and the tax advisor as a specialist must be able to master one discipline as well as the other in order to be able to answer tax problems competently and to navigate his/her clients through this «tax maze».
Thereby, it is important to precisely understand the customer's expectations and situation in order to be able to adequately assess the risks. This also requires that the tax consultant maintains good contacts with the tax authorities so that he or she can assess their behaviour and clarify open questions with them. Therefore, the tax consultant is an intermediary between the legal regulations and the taxpayers on the one hand, and the client and the authorities on the other. Good tactics and the necessary sensitivity are essential to achieve the best possible result for his/her client in the dialogue with the authorities.
However, the success of a tax consultant's work also depends on the support offered by the clients. They can make a decisive contribution to success through honest and sound cooperation. Provide your consultant with the full facts of the matter and hand over all relevant documents to him/her. Only in this way can the tax consultant advise you accurately. The client should also be aware that a tax advisor is not a magician and cannot shield the taxpayer from all taxes. The «rules of the game» have to be followed and the competent tax advisor will certainly not help to hide tax substrates from the tax authorities.