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Better Together: Why Treasury and Tax Need to Collaborate

  • By Staff Writers
  • Published: 9/19/2017

For corporate treasury practitioners, especially those working in multinational organizations, ensuring tax compliance and achieving tax efficiency are two of their biggest concerns when managing core responsibilities. By developing a good working relationship with the tax department, treasurers can take a more strategic approach when planning all corporate actions. Regular engagement with tax issues will allow the two departments to identify and resolve potential problems early, enabling more tax-efficient solutions to be implemented.

AFP’s latest Executive Guide, underwritten by Thomson Reuters, is designed to support treasury practitioners and their tax colleagues to develop good channels of communication, enabling better decision-making. The guide identifies a series of areas in which tax and treasury have a common interest. It then discusses some best practices designed to achieve consistent and frequent communications between tax and treasury. The guide concludes by illustrating how both departments can work together to take a strategic approach to any forthcoming U.S. corporate tax reform.

When working together, treasury and tax should keep some key best practices in mind.

  • Think strategically: How does treasury interact with other departments, including tax, to think about implementing the organization’s business strategy? How frequently and in what format are meetings held? Who participates?
  • Act tactically: How does treasury work with other departments to both plan and execute core transactions?
  • Ensure global regulatory compliance: How do treasury and tax partner to keep track of all relevant current and future regulations, including tax regulation?
  • Keep accurate and timely records: How and where is transaction data kept? Is the data in a format that helps treasury and tax? Are treasury structures (cash pools, intercompany loans, etc.) fully documented and are they being operated in a manner that is consistent with the documentation?

How communications between treasury and tax manifest themselves will vary from organization to organization. But AFP’s latest Executive Guide will help you understand the key elements of an effective partnership, so that both departments will operate more efficiently.

Download the Executive Guide to Tax and Treasury here.

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