Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘chief tax officer’

CTO Best Practices

KPMG’s Chief Tax Officer (CTO) Insights provides Best Practices for improving relations with key stakeholders, including sample metrics that are a valuable working tool.

Click to access CTO_%20Insights_Issue%20Spotlight_Oct15.pdf

Key points:

  • Regularly scheduled meetings should be scheduled.
  • Individualized dashboards should be presented for different stakeholders.
  • A Tax Value Report should be presented once or twice a year, including important metrics as cash tax savings, cash flow processes and people initiatives.
  • An on-boarding program for new stakeholders should be developed.
  • Sample metrics may include
    • Number of audits
    • Tax rates/effective tax rates/cash tax rates– Benchmarks relative to peers

      – Country-specific for global operations

    • Various internal measures regarding risk management
    • Provision-to-return changes
    • Tax exposures and tax opportunities
    • Partnering with the business

    Similar to a tax risk framework that is shared with the larger business and finance leaders, a CTO’s Best Practice tools provide win-win opportunities to interact with key stakeholders and provide assurance for the importance, and recognition, of the tax function in a multinational organizaiton.

A new role: Head of tax controversy

This informative article focuses on the growing importance of tax challenges, with a focused role on tax risk and controversy.

Exchange of tax information among tax authorities, joint audits, reputational risk, tax governance, increased focus by the Board of Directors, importance of intellectual property, royalties, service fees, intercompany financing techniques and transfer pricing complexities are reasons why this role is expected to become more common in multinationals.  The following ideas are provided for thought and comment:

  • Does your company have a Tax Risk Officer / Head of tax controversy?  If not, has this idea been discussed with the CFO, CEO and Board of Directors?
  • How are the tax, treasury and legal functions integrated in a global approach to tax risk and controversy?
  • Are resources in place to facilitate a “joint audit” across several jurisdictions?
  • Are tools such as CAP in the US, horizontal monitoring in Netherlands, etc. being used to provide certainty and timeliness?
  • Are APA’s being used as a tool; who is functioning as the champion for this initiative?
  • Tax amnesty awareness; are you aware of these initiatives on a global basis?
  • Who coordinates legal counsel, internal and external, on audits, appeals and court proceedings?
  • Do you have a process for consideration of tax counsel at certain stages of an audit?
  • What training is provided to finance and other functions to increase awareness of tax risk areas?
  • New transfer pricing legislation; who is responsible for reviewing risks and transfer pricing governance / documentation.

The above thoughts may inspire conversations re: this role to match the increased focus by tax authorities and governments.

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