Boardroom Risk & Reputation

Tax has emerged as a pressing concern in the boardroom, with rapidly evolving tax laws, expansive corporate criminal liabilities, and increasingly assertive tax authorities posing significant risks for unprepared companies and executives.

The tax landscape has undergone profound changes for corporate taxpayers in recent times. Governments have bolstered the authority of tax agencies, equipping them with more stringent reporting requirements and the ominous prospect of criminal sanctions targeting companies and their personnel. Concurrently, tax authorities have been emboldened by successful challenges against aggressive tax avoidance and evasion.

This dual effect has emboldened tax authorities to adopt a more assertive stance against corporations, leading them to pursue a variety of technically dubious arguments, even concerning routine tax planning. Consequently, a new realm of unprecedented board-level risks has emerged.

Businesses must grapple with critical questions: When should they acquiesce to a tax authority's position, and when should they push back? How can they mitigate the risk of corporate criminal tax offenses stemming from the unauthorized actions of employees or agents? What protocols should they establish to ensure a robust defense in case of contingencies? Moreover, how should a taxpayer respond to an unexpected "dawn raid" by a tax authority?