Managing reputational risk in tax | KPMG | BE

How to deal with the reputational risk associated with tax matters?

Managing reputational risk in tax

Develop a management plan to stay ahead of reputation challenges.

Develop a management plan to stay ahead of reputation challenges.

Challenge

Considering the post global financial crisis, the rise of corporate social responsibility, the increased media focus on tax matters, the internationalization of business, and the increasing use of the Internet and technology, we end up with one burning question: ‘How to deal with reputational risk associated with tax matters?’ Greater transparency is a growing demand. Tax directors need to start considering this as part of their overall tax planning strategy.

For many, tax is also becoming a governance and reputational issue. The traditional concept of legality being the appropriate delineation of what is acceptable and what is not, is changing. The reputational question, as vague as it may be, is coming to the forefront, as well as the debate on whether public authorities should embrace greater publication of general, corporate, and individual tax information.

However, there is a clear potential for public misunderstanding and misleading comparisons when this information is provided in its raw form.

In the meantime, a large number of initiatives have taken place that will lead to international rules on transfer pricing, base erosion, profit shifting, and transparency measures. Consequently, large corporates need a strategy to explain their tax information and be prepared to respond to public scrutiny based on the released information.

Tax is a global reality, and today, it demands both a global conversation and, where appropriate, global action. In speaking with our fellow tax advisors around the globe, it became clear that there is a need for a sustained, inclusive and coherent discussion about the key issues that are affecting and shaping globalization and taxation.

 

KPMG Approach

KPMG launched its Global Responsible Tax Project, a global initiative that invites the full range of stakeholders, including taxpayers, academia, media, government, global bodies, politicians, NGOs and tax professionals, to inform thinking on what responsible tax behavior looks like in a global context. They are being asked to debate the questions “what is responsible tax and how can we collectively help to shape the tax system of the future so it is fit for purpose for both developed and developing economies?”

Our hope is that this will help us to inform thinking on what responsible tax behavior looks like in a global context. It is vital to hear as many views from as many places as possible. By driving an inclusive discussion, all stakeholders can contribute to responsible global tax behavior, action and advice.

Some of the initiatives that we have launched already include:

  • A series of high level roundtable meetings across the globe to discuss all the relevant issues about the desirability and feasibility of a global responsible tax.
  • Enhance and facilitate an online conversation through interactive platforms.
  • Refocus on our values making sure that our employees are well aligned.
  • Contribute to the journey from policy to implementation and practice.

 

Furthermore, we advise our clients on the best way to respond to this increasingly complex legal and business environment. Our approach is to monitor and keep abreast of developments which will occur at local country and international forum levels not only in the short term, but also in the long term.

 

The Benefits

Our team of tax experts helps you successfully manage the balance between tax planning, tax transparency, and corporate reputation. Think about the reputational implications of your company being perceived as not paying its ‘fair share’ or engaging in questionable tax planning if this is highlighted on Facebook, Twitter, or the front page of the newspaper.

Connect with us

 

Request for proposal

 

Submit