What is total tax liability?
Benefits of a Total Tax Mindset
5 Steps to Identify Your Total Tax Liability
What Is Total Tax Liability?
A holistic approach to tax strategy. It is an understanding of, and visibility into, the sum of all the taxes your business owes at any given point in time — at the international, federal, state and local levels.
Income
Indirect
Property
Payroll
Excise
Credits
Incentives
Customs
Duties
It is a continuous calculation—constantly shifting from day to day, even from minute to minute.
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Benefits of a Total Tax Mindset
Increase transparency and model the tax impacts of business decisions. Understand the full picture and forecast the ripple effects across the organization.
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Key Benefits
Minimize
tax costs
Reduce compliance risk
Unlock new efficiencies
Have insight into business opportunities
Make better decisions, faster
Follow this process to calculate the current total tax liability for your business.
5 Steps to Identify Your Total Tax Liability
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To calculate your total tax liability, you need to gain an understanding of the breadth of the tax dynamics affecting your organization. Start by reviewing current and historical tax filings and financial reports, and speaking with professionals across all areas of the business, not just tax.
Assess Your Current State
Only 58% of tax execs believe they have a
“high” understanding of their organization’s total tax liability
32% say their understanding is “moderate”
Only 44% of board members believe they have a strong understanding of their organization’s total tax liability
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Has your organization crystallized its biggest tax goals? Why do you want to understand total tax liability?
Define the Vision for Your Future State
To gain a better understanding of the tax implications of business decisions
To communicate
your financial story
to stakeholders
To ensure you’re correctly interpreting and acting on the impact of new legislation
You’ve figured out where you are and where you want to go. What’s missing in between? Assess the gaps across four areas:
Analyze the Gaps
Current State
desired State
People
Data
Processes
For each gap, lay out a plan of action to close the distance between the current and desired states.
Chart the Course
Identify all inputs that contribute to a holistic picture of your tax posture across your whole organization.
Include all areas of tax and all jurisdictions, including international, federal, state and local.
Determine where the data for all of these areas is housed.
identify
integrate
locate
Synthesize the data. Then determine the overall liability for each discrete tax area and how it affects different areas of your business.
Execute
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Data + Experience = Insight
Thanks to technology and globalization, today’s businesses have more opportunities than ever. But alongside these opportunities, the tax function has grown increasingly complex, and often is considered an afterthought when it comes to strategic decision making. A total tax mindset is essential for tax executives to be able to advise on the implications of business decisions.
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Technology
locate
integrate
identify
DISCOVER BDO'S TOTAL TAX APPROACH
What is Total Tax Liability, and what does it mean for your business? Watch this video to find out.
