Emerging governance and ethical standards require companies to put more emphasis on managing risk. At the same time, regulatory pressures related to accounting and reporting transparency have made timely disclosure of liabilities, contingencies and internal control processes an issue of the highest importance. Surprisingly though, tax all too often remains a ‘black box’ — impervious to close scrutiny by investors and analysts. Nevertheless, a company’s approach to tax strategy and risk management has an important impact on its perceived value and should be a key area of focus for any company concerned about maintaining its reputation.
Unfortunately, for a variety of reasons, tax matters are often not dealt with in a systematic way. There may be no clear tax strategy in place; no tax objectives or related policies or manuals; or the tax function itself may be poorly organized. As a consequence, tax opportunities are lost and risks are identified too late. This is a particular danger in the Transport and Logistics Industry, where exposure to corporate tax claims is often high and non-compliance with transaction taxes such as VAT and customs rules can effectively put a company out of business.
How PwC can help you
PwC can work with your company’s Board, CFO and Tax Director to establish clarity around the company’s tax risk profile, develop a enterprise-wide tax strategy and tax policies, and design a tax risk management model. Our approach has numerous advantages: value for the company and its shareholders is enhanced by combining an optimized tax strategy with reputation protection; the tax risk management function is organized efficiently; responsibilities for risk identification, analysis and assessment are clearly allocated; consistent risk monitoring is assured; and adverse trends are recognized early, allowing action before the loss occurs.
