Fast becoming a regular and important topic discussed among organizations today, tax risk is a concept many more business people are familiar with.

1. Should Your Company
Have A Tax Risk Policy?

2. Fast becoming a regular and important topic discussed among organizations
today, tax risk is a concept many more business people are familiar with.
If your business operates across a state line, or internationally, you may be at risk
of triggering certain tax liabilities in those jurisdictions where you don’t have a
physical presence. Not only that, but because an increasing number of countries
are putting policies in place that require higher levels of transparency in the way
in which taxes and finances are reported, tax administrations can access more
details to help them raise issue assessments and investigations.

3. With companies nowadays placing extra focus on fiscal transparency and social
responsibility, tax risk policies are proving to be increasingly beneficial, and can
help businesses better manage tax risk.
Let’s look at tax risk in a little more detail:
What is tax risk?
When a company underreports its’ tax obligations in regulatory filings, such as in
tax or financial statements, theyare at risk of incurring extra taxes, additional
interest and even penalties; this is known as tax risk.

4. Tax risk also includes a company potentially having to pay more taxes than they
otherwise would have legally owed, due to their failure to take up tax planning
opportunities, or the lack of a robust tax strategy (or both).
For companies involved with multi-jurisdictional transactions, cross-border
transactions, complicated supply chains, a large number of remote employees, or
digital operations, among others, tax risk is significantly heightened.
Should a business fail to effectively manage tax risk, it also puts itself in a
negative position in terms of its reputation with stakeholders and investors, or
tax administrations.

5. What are the benefits of putting a tax risk policy in place?
A policy addressing tax risk is best included as part of a company’s overall tax
policy, and can help ensure that the businesses tax behavior is aligned with their
risk profile, overall. Provided a tax risk policy is comprehensive and
implemented properly, it can also bolster tax risk awareness throughout the
organization as a whole through more effective communication, controls and
processes that include tax strategy executive oversight.

6. Here's what should be included in a tax risk policy:
● A tax strategy that is clearly articulated, and has been approved by the
company at management level and the board of directors
● Internal control policies, processes, and review and oversight procedures
surrounding the reporting and planning of taxes, that are robust and which
can be shared with stakeholders and tax authorities
● Resources, training and technology that are sufficient for a tax department,
along with a set of clear and well-defined roles and responsibilities for all
personnel within that tax department

7. ● A policy that clearly sets out the way in which the company approaches
interactions that may take place with regulators and tax authorities
● Regular communication with leaders of the company and board members
regarding the businesses tax strategy, along with procedures to ensure that
when business planning, tax risk is given due consideration

8. To conclude:
Reflecting the way in which a company operates, and articulating its tax strategy
and vison, a tax risk policy that’s consistent with the broader business policies of
the organization, can be extremely beneficial, and if you would like help setting
up such a policy for your company, reach out to a tax professional for further
guidance.

9. At Heyer Inc, we proactively assist our individual and small business clients in
meeting their goals. Our key area of focus is ensuring that our clients remain
compliant with federal and state tax laws by providing them with high quality
accounting and tax services Miami. If you are looking for an individual
accountant in Miami, heyer inc would be a right option.