Staying With The Trend For The Tax Function

The “Buzz Words” these days for the in-house Tax Function are:

• Transformation
• Value Creation
• Tax/Business Strategic Alignment
• Business Partnering
• Risk Management/No Surprises

Transformation of the Tax Function – The Whys, What’s and How’s

Why does the Tax Function need transformation?

The Tax Function as part of a business organization is a fluid function that needs to march along with the overall business goals and strategies of the business organization.

Similar to other corporate functions within a business organization the tax function needs to continually prove the purpose of its existence and add value to the bottom line of the business. One way of doing so is to be a strategic business partner to the overall organization and effectively manage tax risks.

For large multinational corporations the global trends of shifting global markets and changing demographics have resulted in diverse workforces from multiple locations and time zones. Technology-enabled solutions with mobile and remote access are often part of the driving force for the tax function transformation.

What are the ways to transform the tax function?

In order for the Tax Function to be an effective strategic business partner and to add value to the overall business the Tax Function needs to boot its effectiveness and efficiency so that tax talent can be freed up from day-to-day tax operations such as tax return filing and data processing.

Technology tools available to streamline tax functions include document and workflow management platforms with built-in internal controls and work collaboration tools.

There are also process automation tools through the ERPs such as tax-sensitized data management, reporting and forecasting tools.

Tax data analytics is becoming increasingly important for tax professionals to detect risks, trends and planning opportunities. As such, effective data management through data warehouse/data mart applications should be part of the transformation plan.

Where to Start (How to Start)?

1. Define the benefits and need of a tax transformation

Benefits can include risk mitigation, a more agile tax function, enhanced ROIs on current resources.

2. Determine the current state of affairs and desired future stage

Examine the current data needs, technology usage and processes and create a vision of where the tax function would like to be in 3 to 5 years

3. Consider benchmarking and ROI analysis to determine the scope and investment needed for the transformation.

4. Engage the key stake-holders (such as the IT department) and decision-makers (executive sponsorship) in the planning stage.

5. Periodic re-evaluation and monitoring during the implementation stage.

In accordance with Circular 230 Disclosure

Director of Taxes with over 16 years of progressive experience in international corporate tax gained in Big 4 accounting firms and multinational companies in the U.S., Canada and Hong Kong.

Experience in leading a group of tax professionals and hands-on skills in income tax provision and reporting, income tax treaties, transfer pricing , international tax planning and tax audits.

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