Unit 20 business ‘more wary about tax affairs’

1. Pronounce the following words and word combinations. Use a dictionary if necessary.

Cautious, grapple, heightened, era, survey, volatility, disclosure, havoc, aversion, enhanced, mutually exclusive, publicity, align, compliance.

2. Give Russian equivalents to the following words and word combinations.

Tax affairs, to grapple with smth, corporate governance, cost-management, shareholder value, to manage tax risks, tax rate volatility, corporate tax planning, disclosure requirements, to cause havoc, to shelter profits, risk aversion, tax risk management, tax rate management, financial statement tax provisions, restatement of earnings, external contributors to tax risk, to align tax strategy with smth, final approval, compliance obligations.

3. Read the text again and answer the following questions.

1. Why are companies becoming more cautious about their tax affairs?

2. What did the worldwide survey of tax directors find?

3. What has happened to companies’ attitudes towards tax since the 1990s?

4. Why have companies continued to view cost management and shareholder value as imperatives?

5. What country has the changing climate been marked in and why?

6. What prevents companies from providing the greatest value for their shareholders?

7. Why are companies against poor management of tax risk?

8. What are seen as the main external contributors to tax risk?

9. What do tax risks arise from?

10. Are tax directors responsible for the final approval of risk policies or not?

11. What did many tax directors complain about?

4. Complete the sentences with the information taken from the text.

1. The worldwide survey of tax directors found that 44% of companies had become more …-… on tax issues during the past two years.

2. Companies continued to view …-… and … … as imperatives.

3. Considerably higher … towards the … involved is now a new … to be taken into account.

4. The changing climate for … tax … has been particularly marked in the USA, where companies face new … … and the risk of increased … .

5. According to Ernst & Young, there is simply no room for a wrong step that may lead to inaccurate … … tax provisions, a … of … , or … that damages company’s … … and … … .

6. … … , together with changes in … … or their interpretation, are seen as the main external … to tax risk.

7. Internally, … … arise from a failure to … the … … with other aspects of the … .

5. Explain the following English words and word combinations in your own words.

Public perception, stock value, poor management of tax risk, risk aversion, tax planning, final approval, external contributors, tax rate volatility, penalties, reputation.

6. Decide which of the following statements are right and which are wrong. Give the correct variants.

1. According to a worldwide survey of tax directors, companies are not worrying about their tax tariffs.

2. Companies’ attitudes towards tax haven’t changed much since the 1990s.

3. Many companies view managing the tax rate or cash flow as more important than managing tax risks.

4. Companies do not want to provide the greatest value for their shareholders, because a tax position they take will cause havoc to their reputation.

5. As companies are adopting a cautious approach to tax tariffs it means their tax payments will increase.

6. In some cases, increased corporate profitability has increased the demand for sheltering profits from tax.

7. According to Aidan O’Carroll, Ernst & Young’s UK head of tax, effective tax management and effective tax rate management are mutually exclusive.