Tax Management Consulting
Deloitte helps businesses meet the challenges of multi-jurisdictional tax operations, including compliance, reporting and risk management for direct and indirect taxes. We help businesses to understand and transform their processes, technology and resourcing models and where appropriate offer global outsourcing capabilities.
Why consider tax management now?
The tax regulatory environment has been rapidly changing and has become increasingly complicated in recent years. Among other things this is due to various measures implemented by government authorities, including the Japan National Tax Agency, to improve corporate governance and address actions outlined in the OECD’s Base Erosion and Profit Shifting (“BEPS”) Action Plan.
Common challenges regarding BEPS Action 13
- Policy development and review on a global level (i.e. implementation of master and local files)
- Implementing a tax focused reporting structure for information gathering for country-by-country reporting (“CbCR”) purposes
- The limited experience Japanese companies have in the above areas
Furthermore, the continuing globalization of Japanese companies through overseas M&A activity can impair visibility of their overseas subsidiaries’ tax operations. For example, it is not unusual that Japanese tax teams become involved with tax related incidents involving their overseas subsidiaries after the fact due to the lack of prior analysis around tax implications in cross-border transactions.
Common challenges resulting from increased outbound investment and M&A
- Gaining visiblity of sub-consolidated entities of acquired foreign subsidiaries
- Foreign risk is often reported after it has materialised into a serious issue
- Incidents occur which may have been preventable with prior analysis of tax structures and cross-border transactions
Tax departments of Japanese companies face significant human resource challenges in dealing with these issues, which are not just of a tax but also a managerial nature. A change in the mindset of management and the structure of the tax function is necessary to adapt to the current environment. But soliciting support for such change may be difficult since many businesses regard tax as a minor part of their overall accounting and finance responsibilities.
Common challenges responding to the current environment
- Insufficient human resources, in particular staff with English speaking skills
- Embracing unconventional solutions in responding to global challenges
- Changing the mindset of management and structure of tax departments
Deloitte provides clients with advice around tax compliance and tax risk management in cooperation with its member firms in 150 countries around the world. We assist busineses in enacting change and supporting their response to regional and global tax challenges. We also provide support around improving compliance quality and corporate value through the use of state-of-the-art technologies.