Through a survey of 300 senior tax and finance leaders across a variety of regions and industries, Deloitte has identified certain tax transformation trends impacting the tax and finance teams of large multi-national enterprises.
First of all, data and cost management are still priorities for heads of tax. However, there is now a clear focus on tax-related systems integrations and the adaptations needed to comply with the changing tax regulatory landscape, driven, in particular, by the OECD Pillar 2 regime.
Also, as technology is evolving quickly and becomes a “must have”, companies are exploring different strategies to access technology capabilities, including through outsourcing,
Finally, technology is also a key capability sought in new tax staff hires, where there is a race for the “unicorn” profiles, combining industry knowledge, tax savviness and data/IT expertise.
Since 2016, Deloitte has been regularly conducting surveys of tax and finance executives across the globe. The last of such surveys conducted in 2023 identified 5 emerging trends. In this blog we summarize the key findings from the 2023 survey, and overlay some observations that we see being relevant in the Swiss market. The detailed results are accessible here.
Trend 1: Compliance in changing tax environment is the number one challenge for tax departments, making it their top priority. Being able to have global oversight of, and derive insights, from tax processes requires better systems/ data integration relying on accurate, granular and timely data.
Trend 2: Cost reduction and efficiency gains are still important. Main focus in this area is around the global tax provision and tax data management processes, both of which are key to manage the Pillar 2 implementation challenge. Leveraging the Pillar 2 projects to reduce costs and gain efficiency could be a smart way to transform a tax compliance project into a value-add initiative for tax/ finance functions.
Trend 3: Outsourcing is now seen as an enabler to access new technology capabilities, rather even more than a means to reduce costs or de-risk organizations. Going down the outsourcing path can create leverage in terms of capital needs, standardization of processes and technology deployment making it even more worthwhile to explore than in the past.
Trend 4: Not all tax tasks are performed within the tax functions. For instance, for over 50% of the respondents, global tax provisions, or indirect/direct tax returns and payments were sourced outside of the tax functions (e.g. other part of the finance function, shared service centers, etc.). This is here to stay. This is part of a shift seen over the years, where lower value/ routine tasks are shifted away from the tax functions so that such functions can focus on more strategic areas, such as business partnering and adapting to new regimes (e.g. Pillar 2).
Trend 5: The “cyber” tax professional is still the craved unicorn. Sourcing talent with a blend of data analytics/ management and tax expertise is still a challenge in particular in the direct tax field, where technology experience is less available than in the indirect tax domain.
It is not a surprise to see that the transformation trend remains important, and is even accelerating. The pace of the global tax regulatory change is far from slowing down, with other initiatives in the pipelines, such as the EU Commission proposal on VAT in the digital age. In the past, projects in the tax area were mainly driven by one off events (such as M&A) or local legislation changes. Nowadays, changes are global and require strong central tax functions, supported by integrated technology and systems, which process and deliver accurate and timely data. Tax technology is still evolving quickly, but this shouldn’t stop organizations from embracing it, as tax organizations that do not transform will see their costs rise and increase the risk of compliance failures.
If you would like to deep dive into the survey results and discuss the Swiss market perspective, please do reach out to `our contacts below.
Key contacts
Martin Krivinskas
Partner, International Tax & Transfer Pricing
Petrit Ismajli
Partner, Financial Services Tax
Karim Schubiger
Director, Head of Tax Technology Switzerland
Ilan Rom
Partner, Financial Services
