Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘transfer pricing’

Poland’s new TP legislation, with CbC reporting

The referenced KPMG transfer pricing (TP) Alert provides details into the forthcoming sweep of new legislation expected to effective for 2016.  This is a major reform of its domestic legislation which is inclusive of BEPS TP discussion draft intentions, including submission of a country-by-country report (CbC), due one year after a company’s year-end, for for taxpayers with consolidated revenue exceeding EUR 750M.

Click to access poland-may27-2015.pdf

Key observations:

  • The CbC report appears to be applicable for companies exceeding the EUR 750M threshold, regardless of the parent’s place of incorporation.  Thus, this legislation does not rely on the exchange of information to receive this data.
  • Entities with revenues or expenses between EUR 2-10M will be required to produced only a local file, although such file is inclusive of the new BEPS items including organizational structure and restructurings.
  • Medium taxpayers (revenues or expenses exceeding EUR 10M) are required to submit local based comparable analysis.
  • Large taxpayers also have a CbC reporting requirement.  
  • TP documentation is a “contemporaneous” requirement by the due date of the tax return.
  • A Board member will be required to sign a statement confirming preparation of the “contemporaneous” documentation by the deadline.  This applies to all small, medium and large taxpayers.
  •  The 50% tax rate (i.e. penalty provision) to adjusted income is unchanged.

Although expected to become effective commencing in 2016, it is critical to monitor this date to the extent it would be earlier, as it would form a new deadline date for CbC reporting apart from the OECD draft guidelines.  Additionally, the local comparable requirement (similar to Russia) imposes additional cost and complexity for Poland’s new era of TP legislation.

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Transfer Pricing

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Reputation Risk: Insights

A recent Accounting Today article cites the uneasiness of corporate tax leaders re: reputation risk.

Excerpts from the article:

  • The company’s tax policy and principles are being enhanced with greater detail for clarity and transparency
  • Communication of tax strategies to the Board is becoming a primary focus
  • Tax controversy alignment with the Board is being communicated more frequently
  • Increased objective to develop more co-operative working relationships with tax authorities
  • Tax risk is an integral part of decision-making

A link to the article is attached for reference:

http://www.accountingtoday.com/blogs/debits-credits/news/corporate-tax-pros-concerned-about-reputations-74589-1.html

As BEPS Actions are currently being transformed into final Guidelines, the subject of reputation risk would be a worthy topic of focus in the interim to be prepared for an uncertain, complex and disparate trend in the world of international tax.

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Tax Risk Management

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BEPS Action 7: PE, Round 2

The OECD has released its second draft, following its initial draft on 31 October 2014, on BEPS Action 7: Preventing the Artificial Avoidance of PE Status.  Comments, which should be kept as short as possible, on this latest draft should be sent by 12 June 2015.  The discussion draft, and related comments, will be discussed at the Working Party 1 meeting of 22-26 June 2015.

A link to the latest discussion draft is provided for reference:

Click to access revised-discussion-draft-beps-action-7-pe-status.pdf

Key observations:

  • Objective is to address commissionnaire arrangements and fragmentation of operations to meet the “preparatory and auxiliary” exception.
  • Alternative PE options from the first draft have been reduced to 1 proposal re: each PE avoidance strategy, concluding that Option B re: commissionnaire arrangements, Option E re: specific activity exemptions and Option J re: fragmentation are the best models.
  • Follow-up work on attribution of profits issues re: Action 7 would result in additional guidance by the end of 2016, the deadline for negotiation of the multilateral instrument.
  • Low-risk distributor arrangements are to be addressed in Action 9, Risks and Capital.
  • Par. 5 alternative test: Independent agent exception is disregarded if it meets a control (50 % or more interest) test.  Persons (acting on behalf of an enterprise) habitually concluding contracts or habitually negotiating the material elements of contracts can lead to a PE, disregarding the act of formal conclusion/approval/review in another jurisdiction.  “Contracts” refers to the business proper of the enterprise.
  •   Each specific activity exemption would be restricted to activities that are otherwise of a “preparatory or auxiliary” character.  Additional Commentary guidance and examples are provided re: the phrase “preparatory or auxiliary.”
  • Re: splitting up of contracts for the 12-month threshold, the concept of “connected enterprises” replaces “associated enterprises” along with anti-abuse rules for determination.

The above captions provide only a snapshot of the detailed proposals and changes included in this latest draft; accordingly all interested parties should review this draft carefully and consider providing succinct comments for consideration in the final guidelines.

As PE is a strong pillar in the foundation of transfer pricing, this draft will chart the course for future PE determinations that may impact current organization structures and where profits from certain activities are taxed.

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OECD

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BEPS Action 3-CFC Rules: TEI comments

TEI has provided recent comments addressing OECD’s Discussion Draft for BEPS Action 3: CFC rules.  A link to their comments are provided for reference:

Click to access TEI%20Comments%20BEPS%20Action%203%20-%20CFC%20Rules%20FINAL%20to%20OECD%2030%20April%202015.pdf

Key comments:

  • Lack of definitive guidance will introduce additional complexity, double taxation and inconsistency of treaty applications.
  • Overlap with other BEPS Actions and the role of CFC rules questions new complex rules at this time.
  • Confusion re: transfer pricing rules and excess profits approach with arm’s length principle.

The well drafted comments provide clarity surrounding the complexity and uncertainty for new rules addressing BEPS concerns by interested parties.  The first question therefore should always be: Do we need these rules at this time?

Notwithstanding the Discussion Draft’s proposals and comments by TEI, among others, MNE’s should plan for increased efficiencies to coordinate and report information, while ensuring global consistency for application of transfer pricing methodologies.

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OECD / UN

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Audit committee agenda: Tax risk in focus

KPMG has provided a valuable reference re: 2015 audit committee topics, providing insight into company risks and the importance of governance.

The following extract, from the report provided as reference, addresses tax risks in the following manner:

Pay particular attention to the global “tax transparency and morality” debate being driven by notions of “fairness”and “morality,” and consider the impact of tax risk on the company’s reputation.Tax is no longer simply an expense to be managed; it now involves fundamental changes in attitudes and approaches to tax globally. Ensure that tax decisions take into account reputational risks and not simply whether the company has technically complied with tax laws. Monitor OECD and governmental efforts globally to address perceived transfer pricing abuses. Help shape the company’s tax risk appetite, and establish a clear communications protocol for the chief tax officer to update the audit committee regularly. Help ensure the adequacy of the company’s tax resources and expertise globally.

Click to access audit-committee-agenda-2015.pdf

Highlights of future trends:

  • Transparency
  • Reputation risk
  • OECD monitoring
  • Transfer pricing abuse
  • Tax risk appetite

To the extent the Audit Committee has not inquired into BEPS, tax risk frameworks, OECD Actions and transfer pricing governance,  a proactive effort should immediately begin to align the Board with the MNE’s tax risk posture and ongoing governance.  It is imperative a robust tax risk framework is established and communicated effectively.

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Tax Risk Management

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Norway: TP confidentiality ok, transparency violated

The attached KPMG Alert provides dangerous precedent for transfer pricing audits in Norway.  In summary, the Supreme Court has ruled that Norwegian tax authorities may use comparables of other taxpayers to provide assessment information for a taxpayer, while asserting that such information is confidential.

In this era of transparency, Norway has violated the mutuality of this concept while attempting to hide behind its method of transfer pricing assessments with information it is not willing, and legally not obliged, to share with the taxpayer.

Taxpayers should be aware of this development, and proactively engage the tax authorities as to their intent to use secret comparables for any purposes during the audit.

Norway – Tax authorities may use “secret comparables”
April 15: Tax authorities may have information available to them from examinations of other taxpayers or from other sources of information not disclosed to taxpayers undergoing transfer pricing audits. The use of this information, when determining the arm’s length price, is referred to as the use of “secret comparables.” In a recent decision, the Norwegian Supreme Court held that the Norwegian tax authorities may use such secret comparables.
The Supreme Court found that the Norwegian tax authorities had provided the taxpayer with sufficient information regarding the secret comparables—third-party contracts provided by other taxpayers—for the taxpayer in this case to have an adequate opportunity to defend its own position and to invoke effective judicial safeguards by the courts.
Background

In the case before the high court, a Norwegian resident oil company sold gas to a related-party company.

The oil company / taxpayer was the subject of a tax audit, and the Norwegian tax authorities concluded that the company’s transfer pricing determinations for its related-party gas sales were not in adherence with the arm’s length principle.

The tax authorities conducted a discretionary assessment of income and used contracts that had been provided to the tax authorities by other taxpayers—third-party contracts—in performing the comparability analysis. The tax authorities did not fully disclose these contracts to the taxpayer, due to confidentiality rules barring the disclosure of sensitive information.

At issue was whether the tax authorities were required to fully disclose the third-party contracts and whether the tax authorities were allowed to base a reassessment on secret comparables.
Confidentiality rule

The Supreme Court first assessed whether the duty relating to confidentiality prevented the tax authorities from sharing the third-party contracts with the taxpayer. The high court concluded that the tax authorities could not share the third-party contracts with the taxpayer because of the confidentiality rule.
Secret comparables

Because the Supreme Court concluded that the confidentiality rule blocked full disclosure of the third-party contracts, the next question was whether the Norwegian tax authorities could base its reassessment on secret comparables.

The Supreme Court referred to measures under the OECD transfer pricing guidelines—i.e., tax authorities must use great care when relying on information available to them from examinations of other taxpayers within the limits of the domestic confidentiality requirements.

According to the Supreme Court, the tax authorities had shared with the taxpayer as much information about the third-party contracts as they could without violating the domestic confidentiality rule. Therefore, the Supreme Court found that the tax authorities could use the third-party contracts—the secret comparables—in their comparability analysis. The Supreme Court explained that the tax authorities had shared sufficient information about the third-party contracts so that the taxpayer would have had an adequate opportunity to defend its own position and to invoke effective safeguard controls by the courts.

In addition, the high court emphasized that the taxpayer had received several enquiries regarding resale prices from the tax authorities, but had not provided a satisfactory response.

The Supreme Court concluded that the tax authorities were allowed to use secret comparables.
KPMG observation

The case illustrates a conflict between a taxpayer’s right to have access to evidence and the duty of confidentiality imposed on the tax authorities. Further, the case also sheds light on the level of disclosure required in order for the tax authorities to use secret comparables.

Even though this decision and a previous decision regarding captive insurance have allowed the use of secret comparables, tax professionals in Norway have expressed an opinion that the tax authorities need to refrain from using data or information from other sources that may not or cannot be disclosed to the taxpayer. As has been observed, when the tax authorities use secret comparables, the taxpayer has a limited opportunity to defend itself and the courts’ have a limited ability to control the discretionary assessment performed by the tax authorities. Further, the use of secret comparables may affect a taxpayer’s right to due process. Still, despite these concerns, this decision of the Supreme Court shows that the Norwegian courts may accept the use of secret comparables in certain cases.

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Transfer Pricing

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BEPS Action 3: Strengthening CFC rules

The OECD has provided its latest consultation inviting comments re: CFC rules, using 7 building blocks for discussion.

  • Definition of a CFC
  • Threshold requirements
  • Definition of control
  • Definition of CFC income
  • Rules for computing income
  • Rules for attributing income
  • Rules to prevent or eliminate double taxation

A link to the consultation is provided for reference:

Click to access discussion-draft-beps-action-3-strengthening-CFC-rules.pdf

As CFC rules are the foundation underlying a country’s right of taxation, while fiscal pressures are forcing administrations to increase their fisc creatively and aggressively, this consultation indicates the long-term strategies for CFC taxation.  Accordingly, MNE’s and other interested parties should review and provide comments accordingly.

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OECD / UN

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BEPS Country Scorecards

Attached is a valuable reference by Deloitte for BEPS initiatives on a jurisdictional basis for the Americas, Europe, APAC and S. Africa.

http://www2.deloitte.com/global/en/pages/tax/articles/beps-country-scorecards.html

The following information is provided for each included jurisdiction:

  • Current Legislative position
  • Perspective of government
  • Current Tax Authority Assessing Practices
  • Perspective of the Public
  • Unilateral BEPS Actions

As BEPS consultation papers and guidelines are being finalized into final guidance this year, this type of reference is valuable for a comprehensive oversight and awareness.

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OECD / UN

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ICC Policy Statement TP/Customs (2015)

The International Chamber of Commerce (ICC) has released the 2015 update of its policy statement on “Transfer Pricing and Customs Valuation” first issued in 2012 jointly prepared by the ICC Commission on Taxation and the Commission on Customs and Trade Facilitation. The statement supports companies that face the challenge of determining the appropriate related party valuation of goods in the context of disparity between governments’ customs and fiscal policies.

 
The proposals put forward in the statement are designed to help simplify regulations for companies and administrations and also to clarify rules for both parties so as to reduce the negative financial impact linked to divergent valuation. The compliance costs of companies would be significantly reduced if tax and customs administrations were to accept and implement ICC’s proposals that would contribute to a more coherent approach to cross-border trade. These policies would also minimise the risk of penalties that result from opposing views between customs and tax authorities.

 
In February 2015 the policy statement has been offered to the Organization for Economic Co-operation and Development (OECD). Within the context of the G20 mandated OECD Base Erosion and Profit Shifting (BEPS) taxation project. The OECD is working on a revision of its transfer pricing guidelines and the ICC Statement will be helpful in this regard.
Furthermore, the policy statement will be included by the World Customs Organization (WCO) in the WCO’s Revenue Package, which provides guidance (tools and guidelines) to customs administrations around the world on their revenue collection. The WCO Revenue Package will be released in spring 2015.

http://www.iccwbo.org/Advocacy-Codes-and-Rules/Document-centre/2015/ICC-Policy-Statement-Transfer-Pricing-and-Customs-Valuation-(2015)/

Best Practice observations: Customs is playing a larger role in today’s environment of tax transparency, although there continues to be a disparity between customs adjustments and transfer pricing determination.  It is hopeful this welcome update will introduce simplicity and transparency while avoiding the “one-sided” effect of adjusting customs or transfer pricing going forward.

Additionally, timing is also critical to review the MNE functional oversight of customs and transfer pricing, ensuring they operate seamlessly and in tandem as the international tax arena becomes more complex.

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Transfer Pricing

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Spain’s legislation progresses re: CbC reporting & TP documentation

EY’s Global Alert highlights the draft Spanish regulations that would introduce Country-by-Country (CbC) reporting, effective 1/1/2016.

  • Best Practice Observations: The text in bold represents verbiage that should be closely followed, as it may have global implications for flexibility required in CbC reports filed for different jurisdictions.  It is hopeful that the final regulations will entertain additional simplicity and global consistency.  
    • Initially, the test for reporting groups is literally subjective as to “similar terms” of CbC reporting for other jurisdictions.  For example, is reporting in one currency (i.e. US GAAP) equivalent to meeting this test?  What differences, if any, will be acceptable for this determination?  
    • Additionally, the requirement for reporting information in the currency of each jurisdiction implies that a different, or supplementary, approach may be needed for CbC reporting.  To the extent that the OECD final Guidelines are not deemed to be acceptable for Spanish tax authorities, this unilateral “bottoms up” approach will be problematic, complex and costly for everyone.    

Executive summary
On 18 March 2015, the Spanish Government released the draft bill of the new Spanish Corporate Income Tax (CIT) Regulations which complement the provisions included in the new Spanish CIT Law1 that entered into force on 1 January 2015. The CIT Regulations are expected to be adopted in the first half of 2015 and enter into force on 1 January 2016.

This Alert summarizes the new country-by-country (CbC) reporting obligations and the amendments to the transfer pricing rules.

Detailed discussion
On 1 January 2015, a new Spanish Corporate Income Tax Law entered into force (special attention must be drawn to transitory regimes) introducing amendments that are in line with the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) project.

In line with these amendments, changes to the CbC reporting obligations and current transfer pricing documentation requirements have been included in the first draft of the Spanish CIT Regulations. These rules, as currently drafted, are aligned with Action 13 of the OECD’s BEPS Project which aims to develop rules regarding transfer pricing documentation to enhance transparency for tax authorities. In particular, the proposed rules generally follow the approach included in the document issued on 6 February 2015 by the OECD named Action 13: Guidance on the Implementation of Transfer Pricing Documentation and Country-by-Country Reporting (the Guidance).2

Among other changes, the Draft Regulations also address the possibility of using measures of central tendency to determine the point in the range that satisfies the arm’s length principle to minimize the risk of errors derived from comparability defects, as envisaged by OECD Transfer Pricing Guidelines (paragraphs 3.57 and 3.62).

CbC reporting obligations
The proposed CbC reporting obligations would generally apply to Spanish tax resident entities which are “head” of a group (as defined under the Spanish transfer pricing rules), and are not at the same time dependent of any other entity, to the extent the consolidated group’s revenue in the immediately preceding fiscal year exceeds €750 million.

The rules would also apply to Spanish entities and permanent establishments which are, directly or indirectly, held by a non-Spanish resident head entity which is tax resident in a country which (i) has not established CbC reporting obligations in similar terms to Spain; or (ii) has not signed an automatic exchange of information agreement with Spain in relation to these obligations. The wording of the regulations is not clear on how this new rule would apply in practice.

The draft rules establish that the CbC report will have to include the following information per country on an aggregate basis:

a) Group’s revenue, distinguishing between that derived from related and unrelated parties

b) Accounting result before CIT or a tax of similar or analogous nature

c) CIT (or tax of similar or analogous nature) effectively paid, including withholding taxes

d) CIT (or tax of similar or analogous nature) accrued, including withholding taxes

e) Share capital and equity at the end of the fiscal year

f) Average number of employees

g) Tangible assets and real-estate investments, different to treasury and receivables

h) List of resident entities, including permanent establishments, and the main activities these are engaged in

i) Other information that is considered relevant and, if applicable, an explanation on the data included in such information

The information to be provided in the CbC report should be denominated in the local currency of each jurisdiction.

According to the draft of the CIT Regulations, CbC reporting obligations will need to be complied with for fiscal years beginning on or after 1 January 2016; reporting must be completed within a 12 month period from the close of the fiscal year to which the CbC report relates (i.e., companies with a fiscal year ending on 31 December 2016, would be required to file the CbC report by 31 December 2017). A specific tax form will be published by the tax authorities for these purposes.

Transfer pricing documentation requirements
The transfer pricing documentation requirements are modified in very similar terms to the revised standards included in the report on Action 13 released by the OECD on 16 September 2014,3 as follows:

Master file: The data to be included in the Master file is significantly increased to include detailed information on the organizational structure of the group, its business activities, intangibles, Intercompany financial activities, as well as the financial and tax situation of the group (including information on any Advance Pricing Agreement and other tax rulings the group may have obtained.
Entities belonging to groups with an aggregate net turnover lower than €45 million in the preceding year would be exempt from the preparation of the master file.

Local file: Similarly, the information to be included in the Local file is also increased requesting detailed information relating to specific material intercompany transactions.
A simplified local file is foreseen for entities belonging to groups with an aggregate net turnover lower than €45 million in the preceding year. Moreover, small and medium size entities (net turnover lower than €10 million) would be deemed to comply with the local file requirement by filling out a specific form that will be issued by the tax authorities. Information on certain specific transactions will not be excluded (certain business activities carried out by individuals, transfers of businesses and participation in entities, as well as transactions related to real estate property or intangibles).

Impact
The legislative evolution of this proposed measure will be closely monitored and covered in future Tax Alerts but multinational groups with a presence in Spain should focus on the actions that may be necessary to ensure their ability to produce the required information, including preparing protocols for gathering the information and developing internal processes and responsibilities with regard to the new reporting obligations.

Endnotes
1. Law 27/2014 on Corporate Income Tax published in the Spanish Official Gazette on 28 November 2014.

2. See EY Global Tax Alert, OECD issues implementation guidelines for country-by-country reporting under BEPS Action 13, dated 9 February 2015.

3. See EY Global Tax Alert, OECD releases report under BEPS Action 13 on Transfer Pricing Documentation and Country-by-Country Reporting, dated 23 September 2015.

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OECD / UN

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Tax strategies: New entry in Dow Jones Sustainability Assessment

The RobecoSAM 2014 Corporate Sustainability Assessment, referenced herein, introduced tax strategy criteria in their scoring to address critiques of MNE’s tax structures, tax reporting transparency and tax risks.

The publication discusses reputational risk in its new survey questions and is very informative re: companies not yet having a tax policy, as well as asking relevant questions addressing the license to operate in a country, relationship risks with host country and economic development risks in regions where the company is operating.

Click to access CSA_2014_Annual_Scoring_Methodology_Review.pdf

Tax strategies, policies and the perception gap are increasing in importance worldwide, with a kindly reminder for the necessity of developing a comprehensive tax framework that is flexible with today’s challenging international tax environment.

The enterprise risk management analyses for a MNE should have an integrated tax risk framework, coupled with functional interface between common risks that are multi-faceted.

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Tax Risk Management

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OECD BEPS update

EY’s Global Alert discusses the upcoming public consultations on BEPS Actions 8-10, and includes country related BEPS initiatives for Australia, France, Honduras, India and Taiwan.

Click to access 2015G_CM5299_The%20Latest%20on%20BEPS%20-%2016%20March%202015.pdf

The latest updates highlight the pivotal discussions around complex transfer pricing issues including risk recharacterisation (also referred to as non-recognition).  These discussions and final guidelines will set the stage for upcoming controversies, including efforts to avoid double taxation.

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OECD / UN

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BEPS Timing: Mismatch

The Dec. 2016 completion date for BEPS Action 15, Multilateral Instrument (refer to 11 Feb. post) and the completion of the remaining 15 Actions by the end of 2015 is a clear mismatch between issuance of guidelines and an efficient process for implementation.

The multilateral instrument is not projected to be available until the end of 2016, with subsequent enactment by countries in 2017, 2018 or later years.  As a result, countries will need infinite patience to wait for final guidelines, and the corresponding multilateral instrument, without enacting unilateral legislation that may be non-conforming and subject to different interpretations.  Therefore, the result will be increased complexity with more diversity in transfer pricing practices, different interpretations of the arm’s length principle and additional risks of double taxation.

As the pace of BEPS enactment and increased interest by all parties accelerates, it is hopeful that countries will be coordinated in this game of patience to address a new era of transfer pricing interpretation and documentation.  MNE’s should therefore prepare for maximum flexibility to anticipate this divergence.

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OECD / UN

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African Tax Research Network 1st Annual Congress, Call for Papers

The African Tax Research Network (ATRN) requests research papers for its 1st Annual Congress entitled Contemporary Tax Challenges for African Countries.  A link to the conference details is provided for reference;

http://www.123contactform.com/form-1143642/AFRICAN-TAX-RESEARCH-NETWORK-ATRN-CALL-FOR-PAPERS

The African Tax Research Network (ATRN) is a newly established platform for African inspired dialogue, research and collaboration mainly among researchers, policy makers and tax administrators. Its establishment results from the need to identify potential synergies and linkages, in areas of research, between academics, policymakers, researchers and tax officials from the African Tax Administration Forum’s (ATAF) member countries. Launched in 2009, the African Tax Administration Forum is a platform to promote efficient, effective and service-oriented tax administrations and currently consists of 38 African member states. The ATRN, which is housed in the ATAF Secretariat in South Africa, is pleased to announce its 1st Annual Congress from 02 – 04 September 2015 in Victoria Falls, Zimbabwe.

This congress presents an opportunity for academics, researchers, tax administrators, students, tax practitioners, consultants and decision-makers on fiscal and tax policy to gather and discuss different aspects relating to national, regional and international tax matters.

The theme of the Annual Congress is “Contemporary Tax Challenges for African Countries”.
Prospective authors, both academics and practitioners, are invited to submit original and innovative papers on any topic related to this broad theme. Suggested topics of interest to be covered under the main theme include:
Natural resources taxation
Local taxation and fiscal decentralisation
International taxation
Customs & domestic taxation
Indirect taxation
Taxation in the digital economy
Tax treaties
Taxation in banking, telecommunication, insurance
Environmental tax
Taxation and regional integration
Tax compliance
Taxation & the distribution of income & wealth
Taxation and Human Rights (including taxation & gender)
Tax incentives

This conference is an excellent opportunity for interested parties to submit their ideas and presentations to form a win-win opportunity for taxpayers and tax administrations.  A collaborative relationship will enhance future efficiencies in this rapidly growing region.

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Tax Risk Management

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Tax risk roadmap

EY’s extract highlights operational tax risks, Best Practices and a roadmap to implement opportunistic changes.

http://www.ey.com/CA/en/Services/Tax/TaxMatters-February2015-Eight-steps-to-handle-tax-risks

Highlights:

1. Establish and sustain effective tax policies

2. Enhance performance management

3. Organize globally

4. Recruit and retain the best people

5. Implement, monitor and constantly upgrade tax processes and controls

6. Improve data quality

7. Implement the right technology

8. Consider whether existing compliance and reporting capabilities meet today’s needs

Commencing with a global tax policy encompassing a comprehensive tax risk framework, BEPS induced changes are accelerating transparency initiatives and a risk-based focus.

Tax administrations are looking beyond details of data for a country-by-country reporting template for an overall risk assessment of all taxes and relevant processes.  A comprehensive risk framework and system of mitigation controls will also present win-win opportunities for co-operative compliance relationships and discussions of tax risk controls between the taxpayer and tax administration.

 

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Tax Risk Management

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