Tax transforms, business wins: An industry perspective

Enhancing the tax function makes an impact at leading investment management organizations

The speed of change in global tax regulation is faster than ever. For investment management companies, new rulings, growth in cross-border activity, and sophisticated transactions challenge Tax Executives to keep up. What can be done to gain competitive advantage and transform how Tax does business?

The call for tax department transformation

In our work with clients across industries and around the world, we see firsthand that CFOs and other stakeholders are asking tax executives to raise their game and proactively partner with the broader business. Increasingly, these leaders are looking for transformation of the tax function to add more value to the organization.

Indeed, pressure is mounting for tax departments in all industries to expand in scope and impact as their organizations grapple with increasing competition, globalization, and technologies in the midst of stricter and more globally aligned regulations. In addition to the traditional responsibilities of tax planning, reporting, and management, tax executives face urgent expectations to mitigate risk and lead decision making across the organization.

Responding to the emerging demands involves a shift in how—not necessarily what—work is performed. It requires enhancement of tax responsibilities in line with overarching business strategies. Transformation can elevate the capabilities and performance of the tax department in ways that incremental change cannot. It can increase tax’s value to the organization by:

  • Enhancing operational efficiency—Freeing up personnel to perform value-added tax planning activities with increased compliance and reporting efficiency driven by technology and process standardization.
  • Improving risk management—Increasing transparency and formalizing risk procedures that can help effectively address financial statement and audit risk.
  • Increasing strategic and business alignment—Becoming a value-added tax function that is aligned with the organization’s strategies and partners closely with business units.

Deloitte has worked with a number of investment management organizations to gain perspective, plan for change, and start their tax department transformation journeys. Let’s take a closer look at the issues the tax departments of these companies face, and how they are heeding the call to transform.

Tax department transformation in investment management: Key issues and Deloitte Transformation Enablers

In our tax work with leading investment management companies, our clients note some key issues that are keeping them up at night:

  • Frequency of new legislation, regulations, and rulings
  • Global growth driving cross-border activity and investments
  • Increasing use of complex financial products
  • Sophistication of transactions and due diligence
  • Considering, preparing for, and operating after an initial public offering

In response to these many drivers of change, investment management tax departments are looking for solutions that address their challenges in four key areas, which we call Deloitte transformation Enablers:

  • People: Deploy people to more value-added activities.
  • Process, technology, and data: Make better use of their data by leveraging new technologies.
  • Operating model: Simplify processes and policies, streamline their operating models
  • Risk and policy: Manage risk and policy changes globally.

Using this framework, Deloitte helps clients critically analyze the need for transformation and create the necessary changes. Here are just two examples of how Deloitte is delivering value to investment management clients by tackling their complex issues and assisting them in the deployment of solutions:

Leading the future of the tax department

Overall, we see an increase in the number of investment management companies exploring tax department transformation—they are looking for more usable data, mitigated risk, and to redeploy people to focus on value-added activities.

Deloitte’s Tax Department Transformation practitioners help clients start with a solid plan, analyzing tax department performance, providing perspectives for the journey and an actionable roadmap for change.

For more information or to contact Deloitte, visit the tax transformation home page. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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