Our last tax transformation trends survey report, in a series of three, has been issued. While the first two reports focused on transformation trends in tax operations and workforce, this last issue is centred on tax technology. This blog aims at highlighting key findings of the reports series.

It shouldn’t be a surprise that tax compliance obligations are increasing around the globe, becoming more complex to manage due to a number of factors, including increased volume of data and filings expected by local authorities, and new technology requirements. Furthermore, tax functions are confronted with increasing expectations from the business for tax advisory support, related for instance to business transformation. Scenario and tax modelling capabilities are becoming a must-have in order to be able to bring added value to the business or to assess the impact of regulatory changes, such as OECD Pillars 1 and 2. Despite this rise in expectations, tax leaders indicate that their department’s budget is remaining flat. In order to find balance between the increasing burden of compliance and the increasing expectations, tax leaders have only a limited number of levers they can influence.

One way to tackle this challenge is to look at tactical solutions. Such solutions focus on bringing in automation around repetitive tasks, through the implementation of robotic process automation (RPA), data wrangling capabilities or bridging with IT or finance teams to raise awareness on tax data and analytics needs. Those solutions will enable an increase in efficiency, but generally not to the point that is needed in the long run.

A more strategic solution entails rethinking tax operating models, assessing in-house capabilities and efficiency against managed services market offerings or shared service centre setups, in order to reduce the cost of compliance. Since tax functions typically do not hold the purse strings, it will be even more important to capitalise on major finance transformation projects (such as NextGen ERP implementations) that could impact nearly every aspect of the tax playing field. It is therefore key for tax leaders to be more engaged in technology discussions and gain influence with finance, IT and even senior management. A mindset shift is needed from being a data consumer to being actively engaged with the upstream data preparation value chain.

Coping with such transformations require tax functions to access the right talent pool. There are a limited number of unicorns that combine tax speciality, with technology and advisory capabilities. While tax specialists and accountants will no doubt be needed, tax leaders are looking at sourcing data analytics and technology/process transformation profiles. While there is no one-size fits all approach to bringing technology into tax departments, quick wins haven taken the shape of pairing in-house complimentary skills profiles into collaborative teams, breaking up functional domains to pull together diverse skills sets and enable new solutions to be identified and implemented.

There is no doubt that tax functions need to transform to adapt to rapidly changing business requirements and compliance obligations. There is unfortunately no off-the-shelf recipe to engage in such a transformation journey. Every journey starts with a first step. In this context, a first step could be establishing a tax technology vision and/or roadmap to help your tax department prioritise how technologies may enhance their operating models. None of these need to be set in stone but engaging on this first step might have a butterfly effect and get the engine rolling.

Access the full reports below (all three reports were issued between 2021 and 2022):

• Operations in focus
• Talent reimagined
• Technology in focus

If you would like to discuss this topic and potential way forward for your organisation, please do reach out to our key contacts below.

Key contacts

Martin Krivinskas -  Partner, International Tax

Martin is an international tax partner with 20 years of experience working on international tax matters. He has worked extensively with global multinationals, with a particular focus on helping international group’s mitigate tax risk and manage their effective tax rates. Martin has significant experience of supporting clients with a wide range of transfer pricing and international tax matters and is part of Deloitte` s Global Value Chain Alignment leadership team. Martin`s clients are predominantly in the life sciences, industrial products and consumer products industries.

Martin is a Chartered Accountant and a member of the Chartered Institute of Taxation

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Richard Goodwin - Partner, Global Employer Services 

Richard is a Partner within the Global Employer Services team of Deloitte in Switzerland. He is based in Geneva and specialised in Global Mobility. Richard has 20 years of experience in expatriate tax consulting with Deloitte across 5 countries. In addition he has a solid experience in leading an in-house major global mobility change project for a leading company from the Technology, Media & Telecommunications industry, including the review and implementation of the process, systems and technology required for a world class global mobility operation.

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Karim Schubiger – Director, Financial Services Tax 

Karim leads the Tax Transparency team in the Suisse Romande and Ticino markets within the Financial Services Tax & Legal practice, responsible for services related to QI, FATCA, CRS, 871(m) and DAC6. He is a technical advisor and subject matter expert to financial institutions in the banking, trust, and insurance sectors. Prior to joining Deloitte, Karim worked for eight years in support teams of Swiss banks, in particular in areas such as operations, project and change management as well as operational taxes.

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Sarah Rathgeb – Senior Manager, Corporate Tax 

Sarah is a Senior Manager with 15 years of experience in the corporate tax field at Deloitte and leads Tax Technology projects, specialising in tax transformation, process optimisation and automation. She has experience of improving data management and analysis processes for compliance and reporting, building calculation engines and scenario modelling, robotic process automation and process standardisation.

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