One issue the Commissioner apparently has in mind is that company Boards should have a view on the level of tax risk that is acceptable, rather than have others determine it for them. The survey found that 67 percent of respondents believed that their corporation's tax risk strategy either did not exist or was not widely understood thin the organization as a whole(fig 5), and one can infer that a number of Boards are among those who do not understand it. Boards might well respond that because of its complexity, they cannot hope to understand the detail of their tax position, but it is still possible to ask relevant questions and establish relevant guideline The tax risk strategy is comprehensive and is widel understood within the organization and also by its chosen 5: The current 16% external advisers status of organizations tax risk strategies The tax risk strategy is comprehensive and is widely understood within the organization 17% There is a tax risk strategy but it is not widely understood outside the tax department 50% b y understood10% There is a tax risk strategy but it is no There is no tax risk strategy 7 5%10%15%20%25%30%35%40%45%50% Base: All respondents(961 Percentage of respondents Industry best practice- tax strategy Prepare a tax strategy, including a risk strategy, and get approval from the board Set key performance indicators(KPIs), which align to business objectives. Tax should be seen as a business partner by the rest of the business and be integrated a Ensure external advisers are aware of strategy so that their contribution is relevant and so that they can operate as part of the overall tax team. 2004 KPMG International. KPMG International is a Swiss cooperative of which all KPMG firms are members. KPMG International provides no services to clients Each member firm is a separate and independent legal entity and each descnbes itself as such All rights reserved.4 © 2004 KPMG International. KPMG International is a Swiss cooperative of which all KPMG firms are members. KPMG International provides no services to clients. Each member firm is a separate and independent legal entity and each describes itself as such. All rights reserved. Industry best practice – tax strategy „ Prepare a tax strategy, including a risk strategy, and get approval from the Board. „ Set key performance indicators (KPIs), which align to business objectives. „ Tax should be seen as a business partner by the rest of the business and be integrated with the business. „ Ensure external advisers are aware of strategy so that their contribution is relevant and so that they can operate as part of the overall tax team. One issue the Commissioner apparently has in mind is that company Boards should have a view on the level of tax risk that is acceptable, rather than have others determine it for them. The survey found that 67 percent of respondents believed that their corporation’s tax risk strategy either did not exist or was not widely understood within the organization as a whole (fig 5), and one can infer that a number of Boards are among those who do not understand it. Boards might well respond that because of its complexity, they cannot hope to understand the detail of their tax position, but it is still possible to ask relevant questions and establish relevant guidelines. Figure 5: The current status of organizations’ tax risk strategies