A look inside global tax disputes. The global tax disputes environment

For tax executives of international companies — including those charged with tax dispute management — benchmarking against comparable tax departments can be a powerful tool for reflecting on your organizational structures and competencies. It can also help leaders assess how the changes made today can help prepare organizations for the challenges and opportunities they are likely to face tomorrow.

The current survey tells us that companies are seeing a significant rise in tax audits and disputes, and all signs point toward even more intense tax authority activity in the future. The pace at which tax authorities have changed and intensified their approach — both unilaterally and in cooperatively — has been surprising.

With tax audits getting more difficult and time-consuming and levels of tax disputes continuing to rise, are today’s tax functions prepared to deal with the challenges ahead?

Many companies have room to improve their tax dispute function’s organization and the attention they devote to tax dispute resolution. However, a minority of forward-thinking companies are working to make the investments in people, processes and technology they need to effectively manage their tax disputes on a global basis.

Overall, KPMG International’s global tax benchmarking research confirms that behavior is changing among tax authorities worldwide. Feedback suggests tax executives are finding today’s tax administrations increasingly difficult to deal with.

From broader requirements for tax transparency through more stringent transfer pricing policies to greater scrutiny of business substance, the changing rules open the door to considerably more tax disputes — especially given differences in interpretations and timing as countries translate them into domestic laws.

As part of their increasingly sophisticated risk assessment and audit practices, tax authorities in many jurisdictions are employing data analytic tools to flag audit issues and risk-assess taxpayers, in part to make up for shrinking tax department budgets.

Many companies have scope to better protect their bottom lines and preserve value by investing in their tax dispute management functions. Across the survey responses, it is clear that a growing minority of forward-thinking companies are already at work developing robust tax risk management frameworks that are fit for the future.

If you have any questions about this report or would like to discuss a matter further, please do not hesitate to reach out to a local KPMG advisor.

Tax leaders can still participate in the survey. By doing so, you will have the opportunity to receive personalized insights into how your tax department compares across key areas. Please visit home.Kpmg/taxbenchmarking or email tax@kpmg.com to learn more.

The 2019 Global Tax Disputes benchmarking report is based on a secondary survey that was included in KPMG International’s 2019 Global Tax benchmarking survey which offers an inside view of the structure, governance, priorities and performance measures of tax departments today and delivers insights on how leading tax departments expect to transform in the next 5 years. For tax executives of international companies – including those charged with tax dispute management – benchmarking against comparable tax departments can be a powerful tool for reflecting on your organizational structures and competencies. It can also help leaders assess how the changes made today can help prepare organizations for the challenges and opportunities they are likely to face tomorrow.