Marcus Botha, Director, BDO Tax Services (Pty) Ltd and Head of Corporate Tax Consulting
The evolution of international reporting policies and practices directly impact the tax function. Tax policy is fast catching up with international finance and demands on tax professionals are becoming increasingly burdensome. The turbulent global economy has a direct impact on the tax function. Tax consultants need to be law specialists, risk and compliance officers, data analysts, project managers, and auditing and assurance professionals. And these all need to be done on a global level!
The country-by-country (CbC) reporting requirements of base erosion and profit shifting (BEPS) have now been finalised. Companies and their boards and executives need to be aware of the megatrends in the tax landscape and map the way to manage their tax functions. Increased scrutiny on transfer pricing, the move towards greater transparency and enhanced tax reporting, and increased expectations from companies and governments place the role and expectation of tax advisory professionals under scrutiny.
The new complex global tax environment and concomitant compliance burden require cooperation between a number of stakeholders such as tax administrations, business, regulatory bodies, tax advisers and accounting firms. Tax practitioners need ensure information accuracy, build trust between taxpayers and tax administrations, and build sustainable co-operative compliance. As a result, the tax assurance profession has had to significantly expand its skill set to advise on practical positions and assist clients and governments to adapt to current trends and stabilise the international tax environment. The new tax function consists of complex tax-control frameworks, enhanced scrutiny from a wider variety of stakeholders and expanded reputational risk, and enhanced reporting of business activities.
Increased reporting requirements increase data requirements and effective and integrated data management strategies. Quality data must be collected, retained and managed, which raise the need for sophisticated data hubs and increased data security. Data must be kept in a “tax-ready” format for submission to tax administrations as required by Automatic Exchange of Information agreements. Data must be resubmitted to various authorities, whilst being protected. Increased data needs also present opportunities for data usage. This requires companies to move from data-gathering and preparation to analytics. Data management can be a resource-heavy process that requires the focused engagement of skilled and specialised staff.
Tax is becoming an increasingly specialised field requiring not just skilled staff, but purpose-built technology that can make global and enterprise-wide tax management a possibility supported by calculation engines and analytical tools to enable boards and committees to make strategic financial decisions. Multinational Enterprises need to accept and plan for the changes in the tax landscape. The end-to-end management of the tax function is now part of strategic risk management. The focus of a tax function should include:
Tax professionals now need to be knowledgeable in international legislation, technology, project management and data analytics, risk and business process methodology, regulatory and reporting requirements, governance, and skills such as management and leadership. Multinational tax reporting strategies should be in line with business and strategic goals.
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