Tax Authority Correspondence

What is Tax Authority Correspondence?

Tax authority correspondence is the record of all information exchanges (written and electronic) between your company and tax authorities across jurisdictions.

Tax authority correspondence records any communication in the form of letters, notices, reports and filings, between your company and local tax authorities.

It covers:

• Tax-related Communication: Correspondence related to tax liabilities, filings, returns and audits of your company across jurisdictions
• Private Rulings: Correspondence related to local tax laws that govern your company’s operations with respect to a specific scheme, condition or an event
• Tax Investigations: Correspondence related to any investigation into your company by tax authorities
• Tax Disputes: Correspondence related to any tax disputes between your company and tax authorities

Why is Tax Authority Correspondence important for business today?

Tax authority correspondence enables your company to:

• Mitigate any legal and operational risks related to any non-compliance across jurisdictions
• Understand the local requirements, governing laws and terms and conditions related to your company’s tax obligations
• Ascertain the financial expenses related to tax compliance and penalties for non-compliance
• Determine the progress and status of tax filings, disputes, audits and investigations related to your company
• Evaluate the time and resources required to file tax returns and comply with audits and investigations
• Assess the changes in tax structure and their impact on your financial performance
• Provide legal proof and record of tax payment

Why is Tax Authority Correspondence important for an event tomorrow?

Tax authority correspondence is important for an event tomorrow, as it helps:

• Validate your company’s financial condition, since tax filings are reviewed by auditors
• Assess the frequency and nature of tax disputes and investigations and their impact on your business
• Evaluate your company’s past and present tax liabilities and compliance across jurisdictions
• Evaluate the rulings of tax authorities on your company, their reason, and impact
• Assess and understand the tax regulations your company has to comply with across jurisdictions

Pros of addressing Tax Authority Correspondence

• Formulate and implement rigorous internal processes to manage tax investigations, audits and disputes
• Documentary evidence of your tax filings and returns
• Assistance with timely resolution of disputes with tax authorities across jurisdictions
• Compliance with regulations stipulated by tax authorities across jurisdictions
• Transparency between tax authorities and your company
• Standardize dispute resolution mechanisms by referring to past disputes and investigations used by your company across jurisdictions

Cons of not addressing this topic

• Hindrance on your company’ to identify tax liabilities, filing dates and accordingly file returns across jurisdictions
• Increase in the risk of disputes and time- consuming investigations, as tax transactions are not well documented
• Risk of losing track of new tax regulations and their impact on your business
• Difficulties in tracking the progress and status of tax filings, disputes, audits and investigations related to your company.