1. Implement a tax strategy

The key is to be proactive and ensure implementation of a robust, transparent and effectively communicated tax strategy that meets the needs of the business. The strategy should cover the governance of specific business activities with on-going tax operations, in order to comply with both local and global requirements. It is best practice to formally document the strategy, get it approved by the board of directors and then communicate it to all relevant stakeholders.

2. Maintain a tax risk register

Many businesses have processes and procedures in place for a range of situations, anything from a terror alert to Icelandic volcanic ash clouds. Historically not many MSBs have had any processes or guidance in relation to tax risks, however. In conjunction with implementing a tax strategy, businesses should set up, monitor and maintain a tax risk register that should be reviewed regularly at board level. The register should include:

• regular assessment of external and internal tax risks facing the organisation and controls in place to manage these risks

• identification, monitoring and documentation of controls and processes surrounding tax risks arising from all tax processes, including compliance and financial reporting

• obtaining assurance from the relevant tax authorities with regards to any areas of tax uncertainty.

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