Managing (potential) Conflict of Interest

Conflict of interest can be defined as a situation that occurs when an Expert is in a position to exploit his or her own professional or official capacity in some way for personal or corporate benefit. These situations involve public officials who, in their private capacity, have interests that improperly influence the performance of their official duties and responsibilities.

Fostering public trust in government institutions is a crucial element of good governance and builds a stronger relationship between the taxpayer and the State. As an Expert working in a foreign country or jurisdiction for the Host Administration, TIWB Experts have an important role to play in maintaining this taxpayer trust, notably by preventing and managing potential conflict of interest. Further information can be found in Managing Conflict of Interest in the Public Sector: OECD Guidelines and Country Experiences.

State institutions other than the tax administration may have the responsibility for controlling and monitoring how conflict of interest is dealt with in practice. This could include internal audits and investigations by anti-corruption agencies or tax police. It is not possible to identify all possible forms of conflict of interest in advance of a TIWB programme. However, it is possible to manage the risk.

All parties to a TIWB programme must maintain a clear understanding of the applicable rules within the Host Administration that deal with conflict of interest, whether these are contained in formal legislation, regulations, codes of conduct or elsewhere. This includes awareness of the agencies (if any other than the tax administration itself) responsible for monitoring conflict of interest issues, the process for managing any conflict that arises, and any sanctions that may apply in a conflict of interest situation.

The legal responsibility of the Expert to appropriately manage conflict of interest must be defined by the Host Administration and referenced in the TIWB programme Terms of Reference. Existing rules and regulations set by a Host Administration may apply directly to the Expert if she/he is considered to be an employee of the Host Administration. Alternatively, if the Expert is not considered to be an employee of the Host Administration, equivalent obligations and legal responsibility may need to be defined in the Terms of Reference. The Expert is also expected to sign a declaration of no conflict of interest before commencement of a TIWB programme.

Conflict of interest

Practical Tips!

Prior to the TIWB Programme

The Expert shall inform the Host Administration about:

  • Key industry sectors in which s/he has worked;
  • Having any professional activities or private interests with entities maintaining a presence/activity within the Host Administration jurisdiction.

The Host Administration shall discuss specific audits in which the Expert will participate, or, at a minimum, the main industry sectors.

Both the Expert and Host Administration will agree upon procedures for informing management and addressing a (possible) conflict of interest. These will be outlined in the TIWB programme Terms of Reference.

During the TIWB programme

The Expert should immediately discuss any (possible) conflict of interest which may arise with the Host Administration management and the TIWB Secretariat.

After the TIWB programme

The Expert must take all necessary measures to avoid future conflict of interest following termination of the TIWB programme (e.g. in providing tax advice to the private sector or working within another tax administration).

Experts must consider not only existing conflict of interest, but also apparent and/or potential conflict of interest. Apparent conflict of interest arises where appearances suggest to third-parties that an official's private interests could improperly influence the official's performance of duties. Potential conflict of interest may arise where an official has private interests that could have an improper future impact on the official's professional performance.

Herein, "conflict of interest" includes apparent and potential conflict of interest. Where there is an allegation of conflict of interest, it is important to ensure that investigations are carried out and managed appropriately before a determination is made on whether any such conflict exists. During the investigation process, appropriate support for the Expert should be provided from the Host Administration and any Partner Administration if the Expert is a currently serving official.

Within the context of a TIWB programme, conflict of interest could impact not only the expert, but also tax administrations in two separate jurisdictions. This may occur when the public duties of an Expert working for one tax administration (either Partner Administration or prior tax administration) improperly influences the performance of that Expert's official duties while working for another tax administration (Host Administration). In the case of currently serving officials from a Partner Administration working as TIWB Experts, there is an additional possibility of a conflict arising when a company being audited in the Host Administration is a tax resident in the Partner Administration country or jurisdiction.

Responding to potential Conflict of Interest

Determining an appropriate response depends on the programme stage, the degree of conflict and the degree of risk involved. Responses could include the following:

  • Host Administration could reallocate the audits in which the Expert is or will be involved;
  • Audit tasks participated in by the Expert could be limited to those which do not implicate the areas of potential conflict;
  • Host Administration could discuss the specific conflict with the taxpayer concerned and the taxpayer could agree to the Expert's involvement, on the belief that the Expert will help reach an assessment that properly reflects the true position of the entity; or
  • The Host Administration could select another TIWB Expert.

Experts may also make the personal decision to excuse themselves from the particular audit, or even – as the final option – end their participation in the TIWB programme, depending on the gravity of the conflict of interest.

Where the Expert is a currently serving tax official, the Host administration should contact the Partner Administration and the TIWB Secretariat prior to changing the terms of, or terminating, the TIWB programme due to potential conflict of interest. This will allow the Partner Administration the opportunity to discuss the proposed changes to, or termination of, the TIWB programme with the Host Administration and the Expert before a final decision is made.

In any conflict of interest situation, the TIWB Secretariat is available to provide a replacement Expert as necessary.

More practical tips

  • If you are the Host Administration, assist the Experts in understanding relevant obligations relating to conflict of interest and provide guidance on the practical steps (for example, declaration of interests) they must take to fulfil their duty to appropriately manage a conflict or potential conflict once it arises.
  • If you are an Expert or a Host Administration, remain continuously vigilant to monitor the Expert's activities so that potential conflicts can be identified and managed early on in the TIWB programme. Some conflicts can be identified clearly in advance of a TIWB programme. Others (including potential conflicts), may only become apparent later in the TIWB programme.
  • If you are the Expert, you are best placed to identify potential conflicts because you know your previous responsibilities and interests. You therefore bear a great responsibility to identify issues that could give rise to a (possible) conflict of interest during a TIWB programme.
  • All parties should address management of potential conflict of interest in the TIWB programme Terms of Reference. Where a Partner Administration is involved, any potential conflicts which are identified should be discussed with the Partner Administration directly, as well as between the Expert and Host Administration.


Three examples of conflict of interest that could arise in practice:


  1. The Expert is asked by the Host Administration to participate in an audit of a subsidiary of a parent company in which he/she was previously involved in an auditing, while working in the Expert’s own tax administration. Depending on the tax periods and transactions under consideration, this situation may lead to conflicts of interest of varying degree.

  2. The Expert is asked to work on a bilateral Advanced Pricing Agreement (APA) or Mutual Agreement Procedure (MAP) case, where the taxpayer’s related entity is a tax resident of the Expert’s home jurisdiction.

  3. Where the Expert or members of the Expert’s immediate family hold controlling shares or senior positions in the taxpayer entity or one of its subsidiaries under audit.