The global tax landscape and the banking and capital markets industry are both in a state of rapid and constant change primarily as a result of a more global and technologically-advanced world. These changes directly impact the function and expectation of a tax department. Is your business equipped to handle the challenges of 2020? If not, does your tax department know what it needs to do in order to optimise its function in 2020?
In order to be effective in the future the tax department needs to assess its current state and develop an expectation and vision for the future.
We believe that the organisation of a typical tax team will be very different in 2020. The role of the tax department and the expectations for how the tax department delivers its service will both be different. Tax departments are facing new rules, new risks, and new expectations.
The tax operations will shift from spreadsheet-based and disconnected from the main financial systems into a more technology driven function that is integrated – expect that almost all routine tax reporting and compliance will become automated. This automation is needed to meet the growing compliance burdens, enable companies to expand their businesses in many jurisdictions, to manage risk, but also become a baseline expectation.
Effective use of technology will free up tax professionals to provide a more value added and strategic role for the organisation and enter into an era where tax expertise has never been more critical. As this happens, do you have the right type and number of personnel in your tax department? Tax departments of 2020 needs to be able to leverage technology, processes and people in order to extract data in a tax-ready format. We believe most senior tax professionals know this but have run into barriers in transforming their tax function.
As your company redefines its business model, proactively responds to external pressures and reacts to global changes (such as the UK’s vote to exit the EU) the use of tax department by the broader organization will change. Have you started to consider possible future needs and what gaps your tax function may have?
It is impossible for the tax function to start the transformation process alone. It needs support from the broader organisation. The tax function will need to ‘make its case’ and be prepared to answer why and why now? This is not an easy task for a company in the banking and capital markets sector that is facing an endless array of demands. To meet this challenge, start now.
Six Priorities for Success in 2020