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MNCs Facing Increasingly Aggressive Approach to Costly Tax Audits

MNCs Facing Increasingly Aggressive Approach to Costly Tax Audits
30 Apr 2013

Full article first published in CFO Innovation Asia

The economic instability witnessed across the globe over the past few years has resulted in a number of shifts in global tax systems, largely driven by the need of governments to drive revenues. This need has resulted in heightened scrutiny of multinationals' tax affairs and a more aggressive as well as more sophisticated approach to tax audits by authorities. The burden of compliance is only going to rise. These global tax trends were revealed at the Taxand Global Conference in New York.

"The current trends in global taxation include a sweeping wave of compliance, regulatory requirements, the implementation of the OECD report on Base Erosion and Profits Sharing alongside a push for harmonisation" says Frederic Donnedieu, Chairman of Taxand.

"The development of FATCA legislation from the US, CFC reform and increases in information exchange agreements are also of major impact to multinationals and their tax departments.

Potentially of most concern for multinationals is the rise in audits. Dealing with increasing numbers of tax audits and proving substance puts a strain on any tax department. The latest trend to take a more sophisticated and targeted approach to audits, presents an even bigger challenge for multinationals.

We're seeing authorities focusing more on specific taxpayers and specific types of transactions understanding in advance what they want to investigate, and delving deeper" says Donnedieu.


This article is based on the Global Tax Trends Plenary session at the Taxand Global Conference 2013: view the plenary film here.
Access our full suite of Taxand Global Conference 2013 content, including key pointers, films, media commentary, photos and more.


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Taxand's Take

"Potentially of most concern for multinationals is the rise in audits. Dealing with increasing numbers of tax audits and proving substance puts a strain on any tax department. The latest trend to take a more sophisticated and targeted approach to audits, presents an even bigger challenge for multinationals."

Taxand's Take Author