Avoiding blind flight in the area of taxes

When asking financial managers about the most crucial risks and dangers in the financial sector, the subject of "taxes" has become increasingly important over the years and now even occupies one of the top positions on the risk scale.

This has nothing to do with the fact that companies are paying less attention to tax issues - on the contrary - it is the manifestation of a new international development in tax law, which is increasingly moving away from the national tax perspective towards a global view when assessing the tax-relevant activities of companies. This change is being vigorously promoted by multinational organisations such as the EU and the OECD.

The systematic analysis of the various tax systems of the individual states by the OECD and the EU makes the weak points in the global tax network more visible and the exchange of services across borders increases the danger of getting caught in the boughs of complex national tax rules. This development is reinforced by the complete abandonment of the high hurdles in the cross-border exchange of information on tax data by tax authorities. In the future, one can almost speak of "transparent" companies with regard to the level of information with the tax authorities. The increasingly well-trained employees of the tax authorities in international tax law are also making it clear to companies that they can no longer "cheat their way through", but must recognise and minimise the possible risks through strategic planning. Errors and inaccuracies in planning today quickly take revenge and lead to additional tax demands by the tax authorities. The fact that, in the age of the internet, tax disputes between a company and individual states involve not only a monetary risk but also a global reputational risk has been very well observed in recent years (e.g. Starbucks in the UK).

Due to this development, taxes today represent a strategic task that must be systematically and continuously reviewed and analyzed in the course of business processes. The decision-makers must be informed about possible tax hazards and risks contained in their decisions and be aware of the consequences.

For a company to be able to fulfil this task, it needs the necessary instruments. A fiscal "blueprint" gives the company an overview of its fiscal genes and helps the responsible persons to navigate the company around tax risks. This "blueprint" examines the company from a tax perspective. The legal structure, the exchange of services within the company and the provision of services to the customer are topics that are regarded according to their tax effects. The individual components put together result in the tax concept and the tax basis according to which the company is structured and operated.

This "blueprint" is not only a management tool to better understand tax risks. It also helps to identify opportunities and weaknesses in the organisation and in the exchange of services and thus enables an optimisation of corporate structures and processes. It is also a tax planning tool to reduce the tax blindness in a company.