The rise of a new role
With governments struggling to pay off their debts and companies squeezing every last ounce of profit out of their operations, it is no wonder that disputes over tax are becoming more frequent. Indeed, the risk of disagreement, particularly between national authorities and international companies, has rarely been greater. Is it time for a new hero or heroine to appear? Enter the newly crowned head of tax controversy.
Around the globe, a range of companies have established, or are in the process of establishing, such roles. They see this appointment as a way of guarding against differences with the tax authorities, which, unless managed correctly, threaten to undermine their reputations for propriety and good governance.
Moreover, tensions are rising as politicians increasingly challenge firms whose products or services are commonplace in our society, but seemingly pay little or no tax.
Not only have tax authorities become more active in challenging taxpayers; they also talk to each other as never before. Following guidance from the OECD, more and more governments around the world have pressed for joint or simultaneous audits of companies that are liable for tax in their respective territories. Just as one tax authority clamps down on a loophole, it seems, others promptly do the same.
Against this background, it is no surprise that an increasing number of companies, particularly large ones with businesses around the world, have appointed a head of tax controversy. Often, they have worked within the tax administrations of developed markets as well as in the private sector.
Their tasks may differ, yet the job is rarely easy. On the one hand, there are specific risks to anticipate and manage, particularly in rapid-growth markets where the conventions governing tax are typically limited. In more developed markets, on the other hand, there are questions of reputation and governance to consider, which in turn become a board-level issue.
Article from: T Magazine
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