Strategizing International Tax Best Practices – by Keith Brockman

Some examples of Best Practice strategies to strategize for audits, before they begin.

  • Audit defense file for significant transactions and potential risks
  • Transfer pricing documentation; contemporaneous, available within the audit request period, without significant penalties
  • Inter-company Agreements: signed, readily available; does substance of transactions match the form
  •  Tax reserves on statutory financials: review, know how to respond to auditor’s queries
  • Loan agreements, review for arms-length documentation, rationalize different loans with different interest rates
  • Audit notice/telephone call: is there a global communication process for prompt notification and pre-audit planning
  • Change of finance personnel, ensure a seamless transition for audit defense files and documentation
  • Identify the first point of contact for an audit “raid”
  • Who will meet with auditors regularly, company personnel/outside advisors
  • Company information, organization charts, etc.; identify what should and should not be provided
  • Information for other entities/years not under audit; be prepared to react to such queries quickly and consistently
  • Consistency of global methodologies, ensure there is a governance process as tax authorities do exchange information
  • Amnesty provisions; how are you made aware of them, process for review if applicable
  • Annual review of pre-audit Best Practice strategies for awareness and governance

Hope this is helpful, I look forward to your valuable ideas.

 

 

Comments on: "Pre-Audit Best Practice strategies" (2)

  1. Isabelle SOLESSE said:

    Thanks Keith , this is a great list of best practice !

    I would add that prior audit strategic decision & conclusion must be reviewed .
    After the fiscal control, a list of key learnings should be done and shared with all finance team and new control in place pro actively to avoid issues to be repetead.

  2. Ferry Geertman, COO at Key-Group, has added: “Another pre-audit strategy is application of the pre-audit sample, using same parameters as the tax authorities. This will provide the organization in a very efficient way with insight in the potential risk areas and allows means to define corrective actions. When properly presented this will support the statement towards the tax authorities, that the organization has a “handle” on its tax risks.”

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