Strategies, approaches and models - Formulating the Tax Strategy

Page 2 of 4: Formulating the Tax Strategy

Page 2 of 4

Formulating the Tax Strategy

In formulating the tax strategy, the following essential elements should be considered:

Tax Function Objectives: Clearly define the goals of the tax function.
Organizational Model: Analyze the relationship between the business's organizational structure and the tax function (e.g., centralized vs. decentralized).
Company Risk Profile: Assess the overall risk profile of the company and its associated tax risks.
Scope of Taxes Covered: Identify which taxes will be included in the strategy.
Entities In Scope: Determine which entities within the organization will fall under the strategy’s purview.
Roles and Responsibilities: Clarify the roles and responsibilities of individuals involved in tax matters.
Tax Resources: Assess the availability of internal and external tax resources.

The strategy should detail specific tactics for implementation across various roles and tax types, outlining both short, mid, and long-term action plans to achieve the designated objectives effectively.

Activities	Strategic objectives per role
All corporate departments are well-informed and/or have the availability of a VAT work instruction, so it is clear when to consult the indirect tax department.	To ensure that a company complies with indirect tax laws Filing of all required indirect tax reporting, including preparation of proper support files: Reduce unanticipated risks Avoiding penalties for late filing Review indirect tax assessments: Ascertaining that appropriate action is taken before the deadline passes Apply proper cash management Tax audits: Optimize the tax audit process Limit the duration of tax audits Assist and support local operating companies: Ensure that local operating companies benefit from the skills and expertise of the Indirect Tax function	To set clear, accessible and workable policies, standards, manuals and guidelines endorsing the company's culture To ensure that group companies act consistently globally and benefit from best practices applied by other group companies. To create and raise awareness on indirect tax policies, indirect tax risks and changes in laws & regulations
Proactively anticipate on changes in the business and outside the business and successfully communicate these changes to the concerning departments. Furthermore, look after a correct implementation of these changes.	KGT	KGT
Roles and responsibilities have been determined who deals with the tax authorities during an audit (announcement) and tax authorities questions and procedures “how to act” (e.g. never provide documents without first making copies) have been documented and rolled out.	KGT	KGT
Identify, recommend and successfully implement indirect tax projects that assist in achieving the objectives of the indirect tax department part of the business objectives.	KGT	KGT
Ensure identification, select and manage tax risks as a basis for indirect tax management and reporting, ascertain that unacceptable but existing tax risks are identified and that clear, timely communication on tax status, tax activities and tax risks takes place.	KGT	KGT