The cost to a business of getting its tax position wrong and facing an audit adjustment can be significant, including business disruption, penalties and possible criminal sanctions. The onus is on the business to convince tax authorities of its position, and regular business engagement can be hugely beneficial. There are five key windows for businesses to engage with tax authorities over their tax position: upfront tax clearances; real-time discussion; voluntary disclosures; tax audit management; and dispute resolution. Businesses should build trust with tax authorities; they should engage early and openly; take learned opinions, not just as a defence but for tactical negotiation; define their audit approach clearly and manage their costs well; maintain comprehensive contemporaneous documentation from the start; and refrain from arguing the indefensible, but robustly defend the positions they believe to be right.
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The cost to a business of getting its tax position wrong and facing an audit adjustment can be significant, including business disruption, penalties and possible criminal sanctions. The onus is on the business to convince tax authorities of its position, and regular business engagement can be hugely beneficial. There are five key windows for businesses to engage with tax authorities over their tax position: upfront tax clearances; real-time discussion; voluntary disclosures; tax audit management; and dispute resolution. Businesses should build trust with tax authorities; they should engage early and openly; take learned opinions, not just as a defence but for tactical negotiation; define their audit approach clearly and manage their costs well; maintain comprehensive contemporaneous documentation from the start; and refrain from arguing the indefensible, but robustly defend the positions they believe to be right.
If you are not a subscriber, subscribe now to read this content.
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