Financial crises, corporate collapses, shareholder disputes and creative accounting practices have taken their toll on trust in our institutions.

Customers, communities and regulators are expecting more, and the bar continues to lift on what a good corporate citizen looks like.

Inland Revenue has been reviewing tax governance in the corporate sector since early 2021 and although some progress has been made, there are still significant improvements businesses can make. Going forward, IR will be holding all entities to account and continuing its focus on improving corporates’ tax governance.  

Know your risks

Today, failing to establish proper tax governance can lead to overlooked tax risks that arise from unclear responsibilities and poorly managed procedures resulting in: 

  • increased scrutiny from IR
  • a higher risk of IR penalties  
  • missed opportunities to maximise shareholder value and effectively manage tax costs
  • inadequate knowledge of tax law updates resulting in lack of management and board awareness of key risk areas
  • risks associated with key personnel. 

How we can help

Each business will be at their own stage of the tax governance process and one size does not fit all, so it’s important your documentation and processes are designed to fit the unique needs of your organisation. Here’s how we work alongside our clients to deliver meaningful value, so you can proactively mitigate your tax risks.

We’ll work with you to determine where your business currently sits in the tax governance lifecycle by:

  • undertaking a review of your existing tax function, including your systems and processes
  • leveraging existing knowledge of your business
  • identifying areas for improvement and alignment with best practice.

We can help you get your documentation up to speed by:

  • creating an overarching tax strategy that outlines the background, risk profile and responsibility for tax  
  • detailing your tax framework to identify, assess and understand tax risks
  • defining significant tax risks
  • defining clear processes during the implementation phase to embed your tax governance framework into the business.

A key aspect of tax governance is regular reviews and testing. This can include:

  • an annual review to ensure your tax governance framework remains fit for purpose from a business and best practice perspective
  • health checks of all tax types
  • identifying opportunities to maximise shareholder value.