• 5 Oct 2011

Get A Jump on the Competition

Get A Jump on the Competition

Working in conjunction with Ernst & Young, we have published a new white paper that highlights the challenges Australian companies face with global tax reporting processes. In 2012, Australia’s 100 largest companies will be required to disclose uncertain tax positions as part of the tax return filing, in a trial modelled on the US tax authorities’ approach to uncertain tax position disclosures.

Jon Dobell, partner and Asia Pacific leader, Reporting & Compliance at Ernst & Young, said: "The upcoming changes to tax reporting should force companies to carefully consider how their tax function is organised, staffed and integrated to deliver and achieve value.

"The tax function must see these challenges as an opportunity for real change and global tax reporting can be taken to the next level of efficiency and effectiveness."

With the upcoming National Tax Summit high on the agenda of tax professionals, and amidst a weakened economy, the white paper calls for companies to be more proactive. Paul Brindle, managing director, Australia and New Zealand for our Tax & Accounting business, believes companies are restricting tax functions by taking a segmented approach to tax accounting and compliance. Tasks are often performed in isolation, and with duplication.

"Leading organisations should regard tax as a critical component of their strategic business approach towards achieving their desired objectives. Companies need to carefully consider how their tax functions are organised, staffed and integrated within the broader business to deliver value. A reactive approach to tax can result in lost opportunities, reduced cash flow, operating inefficiencies, unwarranted risk and a higher tax liability.

"Organisations that treat the tax function as integral to their overall business strategy can reap countless rewards – including improved tax reporting processes and increased productivity – potentially saving organisations millions of dollars," says Brindle. 

The white paper provides useful insights to help appraise existing global tax reporting challenges and identify possible improvements in the accuracy and timeliness of these processes.

Other points raised in the whitepaper include:

  • Tax regulators around the globe, including the ATO (Australian Taxation Office), are now adopting a risk-based approach to reviewing taxpayers’ affairs and identifying non-compliant taxpayers;
  • Looking at processes holistically and defining a new tax vision strategy will help to identify synergies and dependencies, as well as data and process gaps across tax accounting and compliance;
  • Historically, tax accounting and compliance processes have grown organically, incorporating changing business and reporting demands. Some of the typical challenges can be divided into three main types: governance; people; and infrastructure and operations.