Taxand The CFO: Key Tax Challenges Facing CFOs in an Age of Scrutiny

Our first Taxand Global Survey conducted with an exclusive selection of our large multinational clients located across the Americas, Europe and Asia, examined the pressing tax challenges affecting businesses today.

Here you can read the highlights and Taxand's Take providing some steps you can take now to address the issues uncovered.

For the full research findings report, please request your copy here.

Highlights 

Increased pressure on tax departments:

•  82% of multinationals have experienced a rise in audits
•  84% of multinationals surveyed said that increased transparency means they have experienced a rise in the cost of compliance

A critical public:

•  51% of multinationals believe exposure of tax planning activity has a detrimental impact on company reputation

Tax not high on the Board agenda:

•  Surprisingly, only 24% of multinationals surveyed said that tax issues were covered by their Boards "to a great extent" given the concerns over reputation

Cross border issues:

•  Transfer Pricing seen as the most challenging area of tax globally
•  Transfer Pricing has seen the sharpest rise in scrutiny from tax authorities

Desire for improvement:

•  61% of multinationals believe relationships with tax authorities have improved in the past year
•  74% of multinationals stated global tax harmonisation is desirable

Taxand's Take

Taxand's Take provides some of the steps you can take now to address the issues uncovered.

• Continue to engage with tax authorities to establish more certainty in your tax arrangements
  • devote resource to ensure documentation and backup information is up to date and immediately available if requested
  • keep a rolling document of all risk factors with clear background information on your company’s actions and rationale
  • due diligence: check your calculations regularly, tally and reconcile
• Use technology to effectively manage the increase in transparency and scrutiny
  • consider involving tax authorities in your system implementation to ensure the programme and its reporting capability is fit for purpose across the world 
  • ensure programmes are properly configured for differing jurisdictions
  • dedicate time and finances to training your staff to use systems effectively
• Consider rapid and effective communication of your tax strategy to clearly justify your tax position and manage exposure and reputation
  • review and accurately record tax positions in all financial statements and public records
  • demonstrate your contribution to the economy through tax collections
  • consider proactively communicating tax contributions
  • align tax planning strategy with business objectives and make sure economic substance
    evidenced
  • reconsider investments in or through tax havens which will raise red flags
• Use transfer pricing as a commercial driver:
  • identify where operations are expanding and contracting and use this change to get the pricing correct
  • use APAs and Certainty Rulings to increase the scope of your tax planning
  • make sure your planning is commercially based and supported with real economic substance
• Undertake commercially driven international tax planning and focus on tax structures that will enhance your shareholder return
  • Establish commercial objectives first – then organise tax structures
  • Consider the stability of the country before putting substance there
  • Consider tax implications at the outset to inform your strategic decision-making

Request your copy of the Taxand Global Survey 2011 report here

To discuss how these trends are affecting your business specifically please contact your Taxand advisor.

For Taxander quotes and more opinion please read our press release here.

Delegates attending the Taxand Global Conference 2011 will be receiving a copy of the survey results w/c 2 May 2011.