Tax authorities worldwide and in Cambodia are under ever increasing pressure to collect revenue, causing an increase in tax audit activity across all jurisdictions and all types of tax. Uncertainty can arise as global businesses seek to access emerging and developing markets where the local tax environment may be unfamiliar, subject to different interpretations and extremely unpredictable.
This pressure on tax authorities is resulting in more frequent audits, more aggressive enforcement, larger adjustments, and increased potential for penalties and interest to be applied. Wherever you do business, it’s important to approach your tax matters proactively and be ready to respond if and when a local tax audit commences. Tax professionals can help you prepare to manage a tax authority challenge that you encounter.
For any business preparing for a tax audit, appropriate strategies for response and compliance are all important. Uncertainty, inefficiency and lost opportunities can result from the lack of a plan of action for resolving potential tax disputes. When your organization finds itself under the tax authorities’ audit, you need to be ready to take control and manage the tax issues and resolution process steering it towards the best possible outcome.
You should consider the following:
- Have previous tax audit findings been resolved and remedial actions been implemented to avoid recurrent issues?
- What procedures do you have in place to actively manage and address tax risk to avoid future tax disputes and exposures?
- Have you proactively documented your tax transactions and possible uncertain tax positions?
- Are your analyses of your tax positions well stated, complete and supported by relevant documentation?
- Have you a strategy for dealing with the tax authorities in order to resolve disputed or controversial tax issues?
- Do you have a clear picture of possible resolution scenarios, whether by negotiated resolution or by formal appeals, of disputed tax issues?
- Do you know your options for dealing with a number of open enquiries strategically rather than on a per enquiry or issue basis?
- Are you engaging with the tax authorities in the most effective way?
- Have you considered the impact of your resolution on your tax positions in all affected business activities and transactions?
DFDL’s network helps corporate taxpayers protect against, prepare for, and respond to challenges by the various tax authorities. Our professionals are experienced in all stages of the tax dispute process – from pre-transaction analysis and documentation to closing the file on items in dispute. We work with you to help lessen the likelihood of a challenge or audit before a dispute arises and to resolve those matters that ultimately become the subject of a dispute.
Whether your tax issues involve income taxes, tax on salary, transfer pricing, indirect taxes or other taxes, we can assist. Our professionals have local understanding, based on practical experience, of how best to approach the resolution of small or large, or complex tax disputes. This can be achieved in a way that can help build an effective and on-going relationship with the tax authorities.
If managed properly our approach can produce significant benefits, including:
- Refunds or credits of overpaid taxes
- Certainty over tax filing positions, allowing for the release of unnecessary tax provisions and providing assurance on the availability of tax attributes and tax incentives
- Reduced compliance costs, freeing your in-house tax professionals for more value-adding work
- More effective working relationships and reduced tax risk profiles with local tax authorities, potentially easing future tax audit coverage
- Improved reputation with internal and external stakeholders.
by Rolf Winand – Regional Partner, Tax
rolf.winand@dfdl.com
