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Navigating BEPS: How Boards can lead from the front in managing tax risk

In the past, boards might have been happy to let specialist tax teams manage the business’ tax affairs, with the key performance indicator being the effective tax rate (ETR). But faced with so much scrutiny and change, what are the priorities now?

Major tax reforms used to be infrequent and would generally have taken years to come into force. But multinational businesses now face a conveyer belt of far-reaching shifts in direct and indirect taxation, both locally and as part of international developments emanating from the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan. The challenges are heightened by the growing oversight of multinational groups’ tax affairs from tax authorities, investors, non-governmental organisations (NGOs) and the media.

Faced with so much scrutiny and change, we’ve noticed that priorities for boards are now:

1. The impact on their company’s reputation with stakeholders

2. Ensuring efficient and ‘no surprises’ compliance

3. How to gain certainty over the impact of tax developments

4. The risks relating to these other three priorities – how much risk is comfortable and how can it be managed in the most informed and effective way?

This latest article to help you navigate BEPS looks into tax at the top of the boardroom agenda and how boards should take the lead in managing the whirlwind of change. Drawing on our work with a variety of businesses, we believe that there are four key priorities:

1. Seeing the big picture

2. Clear strategy: Balancing tax risk and effective tax rate

3. Implementing and enforcing policies

4. Develop an effective tax communication strategy

Talk to your local firm about how Grant Thornton can help your organisation prepare for the requirements set out in the OECDs BEPS Action Plan