Tax Risks: Key to success
Tax Risk Management is an integral part of developing and executing a Business Plan. Sound and effective implementation of Tax Risk Management promotes best practice concepts at the corporate/strategic level as well as a means of improving tax payment scheme. A structured and proactive approach to Tax Risk Management should form a core part of the decision-making process at all levels within an organization, thus improving the ability to control negative consequence and exploit opportunities for tax knowledge and success.
Key to successful Tax Risk Management are:
By ramlitax™
1. Introduction:
- Self-assessment
- Tax audit/investigation
- Tax as a risk
- Solution
2. Self assessment:Integrity in reporting and compliance
- Tax agenda as main issue
- Tax issue require CEO, Proprietor and/or Tax Advisor to pay attention
3. Tax audit/investigation: Recognised taxpayer’s integrity
- Excellent tax administration
- Civil investigation
- Criminal investigation
4. Tax as a risk: Technical:
- Advise/knowledge
- Implementation
- Operational:
People
Procedures
System
5. Reporting: Financial statement
- Risks profile
- Tax return
- Payment
6. Recognising changes: Reporting
- Policies
- Method
- History
7. Reputational risks: Corporate image/reputation
- Inaccurate tax figures in accounts
- More tax liabilities than required by law
- Decreasing investors support
8. Financial risks: Increased IRB audit focus
- Incidental cost incurred
- Increased/additional assessment with penalties
9. Personal risks: Fines and imprisonment
- Shifting of corporate risk to personal risk
10. Identification of risks: Understand business operations
- Understand tax obligation to it’s operation
- Review all process and procedures on tax compliance matters
- Review all technical position adopted in tax obligation
11. Business operations: Nature of business
- How it was carried out
- Suppliers chain form procurement, processing, ………sales of final product
12. Tax obligation: Corporate tax
- Individual tax
- Withholding tax (WHT)
- Indirect tax
- Cross border direct/indirect tax issues
13. Tax compliance: review process & procedures_Corporate/individual tax filing
- Filing of estimated tax/review of tax payment
- Determination of WHT
- Installment payment/STD/WHT/payment of underpaid tax
14. Tax compliance: review process & procedures_Preparation of corporate/individual tax requirement (reliable input data/accurate information)
- Evaluate them by a person with sufficient tax knowledge
- Steps and procedures should be established to meet the tax requirement (as provided in the legislation)
15. Technical position: Case study
- Impact/Weaknesses resulting:
Paying more or less tax and penalties
Depending on result of the accounts
Open to risks
Less enjoyment
Increased IRB focus
16. Solution: Risks frameworkDefine key process
- People responsible
- Segregation of duties
- Proper documentation
- Check and balance
17. Solution: Free tax risks Set up internal audit
- Educate internal auditors with tax knowledge
- Frequently monitor monthly tax payment and yearly tax compliance
- Updating tax changes
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