Description: 'Tax Risk Management' as a Digital Business Capability refers to the ability of a business to leverage digital tools and technologies to identify, assess, manage, and mitigate potential tax-related risks. This capability involves the use of digital systems to ensure compliance with various tax laws and regulations, accurately calculate tax liabilities, and optimize tax strategies. It also includes the ability to monitor changes in tax legislation, analyze their impact on the business, and adapt tax strategies accordingly. Through effective tax risk management, businesses can avoid penalties, reduce tax costs, and enhance their financial performance. Additional information: 'Tax Risk Management' as a Digital Business Capability refers to the ability of an organization to utilize digital tools, technologies, and systems to identify, assess, manage, and mitigate various tax-related risks. This capability involves the use of advanced analytics, artificial intelligence, machine learning, and other digital technologies to streamline tax processes, ensure compliance with changing tax laws and regulations, and minimize potential tax liabilities. In a broader sense, this capability encompasses several key components: 1. Tax Compliance and Reporting: This involves the use of digital systems to ensure accurate and timely filing of tax returns, adherence to tax laws and regulations, and efficient management of tax-related documentation. 2. Risk Identification and Assessment: This involves the use of predictive analytics and data modeling to identify potential tax risks, assess their potential impact, and prioritize them based on their severity. 3. Risk Mitigation and Management: This involves the development and implementation of effective tax risk management strategies, leveraging digital tools to automate risk mitigation processes, monitor their effectiveness, and make necessary adjustments. 4. Strategic Tax Planning: This involves the use of digital technologies to analyze tax data, identify tax-saving opportunities, and make informed decisions that align with the organization's overall business strategy. 5. Stakeholder Communication: This involves the use of digital communication tools to effectively communicate tax-related information to internal and external stakeholders, including tax authorities, investors, and employees. 6. Continuous Improvement: This involves the use of digital technologies to continuously monitor and improve the organization's tax processes, identify areas of inefficiency, and implement necessary improvements. In essence, 'Tax Risk Management' as a Digital Business Capability enables organizations to effectively manage their tax obligations, reduce potential risks, and make strategic decisions that contribute to their overall business success. Example: 1. IRS's Risk Assessment System: The Internal Revenue Service (IRS) in the United States uses a digital system to assess the risk of tax evasion. This system uses algorithms to analyze tax returns and identify potential cases of fraud or evasion. 2. HMRC's Connect System: The UK's HM Revenue and Customs (HMRC) uses a system called Connect to analyze data and identify potential tax evasion. This system pulls in data from various sources, including banks, property transactions, and even social media, to build a picture of a person's or company's financial situation and identify any discrepancies. 3. Australian Taxation Office's Data Matching Program: The Australian Taxation Office (ATO) has a comprehensive data matching program that uses digital technology to cross-reference information from different sources. This helps to identify individuals and businesses that may not be declaring all their income or are claiming too many deductions. 4. Canada Revenue Agency's Electronic Tax Risk Assessment: The Canada Revenue Agency (CRA) uses an electronic system to assess the risk of tax evasion. This system uses data analytics to identify high-risk cases that require further investigation. 5. South Africa Revenue Service's Compliance Risk Management System: The South Africa Revenue Service (SARS) uses a digital system to manage tax compliance risk. This system uses data analytics to identify non-compliant taxpayers and develop strategies to improve compliance. 6. Singapore's IRAS's Risk Management System: The Inland Revenue Authority of Singapore (IRAS) uses a digital system to manage tax risk. This system uses data analytics to identify potential cases of tax evasion and develop strategies to mitigate this risk. Publisher: EIRA Team LOST view: OV-Digital Business Capabilities Catalogue Identifier: http://data.europa.eu/dr8/egovera/TaxRiskManagementCapability EIRA traceability: eira:DigitalBusinessCapability EIRA concept: eira:SolutionBuildingBlock Last modification: 2023-07-27 dct:identifier: http://data.europa.eu/dr8/egovera/TaxRiskManagementCapability dct:title: Tax risk management (DBC)