Tax & AccountingAugust 02, 2022

A $1 Billion corporate tax settlement shines a light on the importance of effective tax governance

The tax settlement between the Australian Taxation Office (ATO) and a global mining company is a reminder to multinationals of the importance of strong tax governance. These incidents highlight the need for multinationals to have robust tax governance structures in place.

Without such structures, companies are at risk of incurring large financial penalties and damaging their reputations. Multinationals must therefore ensure that they have adequate systems and processes in place to manage their tax affairs in a compliant manner. However, compliance is only one part of the equation. Multinationals must also consider how their tax practices impact their reputation and relationships with stakeholders such as governments, shareholders, and the general public. A company that is seen to be paying its fair share of taxes is more likely to enjoy goodwill from all parties involved.

A practical approach for establishing a strong tax governance strategy

In order to avoid these risks, businesses need to ensure that their tax practices are in line with government regulations. This includes ensuring accurate record-keeping, proper filing of tax returns, and timely payment of taxes. Additionally, businesses should have adequate internal controls in place to prevent and detect tax evasion.

The key components of good tax governance are risk management, internal controls, transparency and communication, and accountability.

  • Risk management helps to identify and manage risks that could impact the organization’s tax liability.
  • Internal controls help to ensure that the organization’s tax compliance processes are efficient and effective.
  • Transparency and communication are important for ensuring that all relevant stakeholders understand the organization’s tax strategy.
  • Accountability helps to ensure that the organization is held accountable for its actions in relation to taxes.

Tax technology and its impact on tax governance

Technology has always played a role in tax governance, from the early days of ledgers and quill pens to today’s sophisticated computer systems. However, the recent proliferation of tax technology has profoundly impacted how taxes are administered. By automating many of the tasks associated with tax compliance, tax technology has made it possible for tax authorities to process more returns in a shorter period of time. In addition, tax technology has helped improve tax data accuracy, making it easier for authorities to identify and collect unpaid taxes. As a result, tax technology has had a significant positive impact on tax governance. While there are still some challenges associated with its implementation, there is no doubt that tax technology will play a critical role in supporting multinationals in meeting increased tax reporting and compliance obligations.

How to stay ahead of the curve regarding tax governance and technology

Tax technology is constantly changing, and it can be hard to keep up with the latest developments. However, there are a few key ways to stay ahead of the curve. First, staying informed about new tax laws and regulations is essential. The Wolters Kluwer iKnow research platform is an excellent resource for staying up-to-date on the latest changes. Finally, it’s also helpful to use corporate tax software like CCH Integrator, which is regularly updated with the latest tax information and can help set the appropriate frameworks to meet obligations from different tax judicious. This ensures that you always use the most up-to-date tax data and calculations. By following these tips, you can make sure that you’re always ahead of the curve when it comes to your tax obligations.

CCH Integrator — the global tax compliance and reporting platform

Corporate tax technology like CCH Integrator from Wolters Kluwer can help companies put in place the frameworks needed to ensure our company is compliant with tax authorities and regulators worldwide. CCH Integrator provides a complete solution for managing tax compliance, from initial data collection and analysis to tax return filing and payment. The software is designed to help companies streamline their tax processes, improving efficiency and reducing the risk of errors. In addition, CCH Integrator offers robust reporting and analytics capabilities that can help companies identify opportunities for savings and improve their overall tax position. With the right corporate tax technology in place, businesses can focus on what they do best — growing their business.

To learn more about how tax technology can help with your tax governance needs, download our free guide guide on how our CCH Integrator can help you meet the Australian Tax Office (ATO) Justified Trust requirements.

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