Introduction
By now many multinational companies have begun the process of addressing how Financial Accounting Standards Board Interpretation No. 48 ("FIN 48") will apply to their global business. The challenge in understanding the FIN 48 implications for tax planning and local country compliance issues in foreign jurisdictions will be significant. FIN 48 requires companies to ascertain, evaluate, and conclude on discrete tax risks. Companies must not only account for the interest and penalties on these conclusions, but must also adhere to a new disclosure regime.
Companies may not have the wherewithal to fully appreciate the implications of their tax posture due to many factors, including lack of knowledge, time constraints, resource constraints, quality of the past compliance filings, and insufficient mechanisms to gather data. Many issues, including documentation, transfer pricing, arbitrary enforcement and inconsistent interpretation by regulators, are common in many
