What’s driving

your Tax Agenda?

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 Contents Tax Agenda
Where are you?
Internal influences

External influences

Tax Function

Bridging the gap

Internal influences

External influences

Tax Function

Notes

© 2017 EYGM Limited

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 Tax Agenda

© 2017 EYGM Limited

All Rights Reserved EY Tax Agenda
 Where are you? Internal influences
Use the scales below to rate the maturity level of your tax function
Developing
► Tax team has a strategy to improve connections
Internal with stakeholders across the organization and is
influences often not involved in internal matters that may
overview impact the tax function
► C-suite views tax function primarily as a cost
center
► Minimal alignment between operations, tax, and
Strategy C-suite
► Tax doesn’t report directly to the C-suite
► Tax employees have limited technology skills
► Tax extracts data manually from ERP systems
► Tax requirements are often overlooked during new
system implementations
► Tax talent is disconnected across the enterprise
Enterprise
► Minimal focus on shareholders and the C-suite’s
sensitivity to financial and reputational risks
► Minimal processes in place to identify and manage
tax risks
► Tax has limited interaction with the audit
committee
Governance
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Established
► Tax team is connected with some key stakeholders across
the organization, but not always involved with internal
matters that could impact the tax function
► C-suite, tax and operations periodically consult on
strategic matters
► Tax and business operations agendas are partially aligned
► Tax strategy supports the company’s working capital
requirements as needed
► Relevant data is extracted, validated and passed to the tax
function
► Tax employees are fairly proficient in the use of finance
systems
► Tax requirements are included in end-stages of new system
implementations
► Balancing responsibilities on an ad hoc basis to
shareholders and the C-suite’s sensitivity to financial and
reputational risks
► Developing a tax control framework
► Uses processes to identify and manage risk on an ad hoc
basis
Leading
► Tax team is well connected with key stakeholders across the
organization, and is effective at consistently assessing internal factors
that may impact the tax function
► Operations, tax and C-suite agendas are aligned
► Tax and CFO meet regularly
► Tax function is viewed as a strategic business partner across the
enterprise
► Tax strategy supports the company’s overall need for working capital
► Builds or employs tax capabilities within new operating models
► Secures appropriate tax talent in HQ and other key operating centers
► Tax employees are trained and use new technology, including data
analytics
► Tax requirements are included in new system implementations
► Balancing responsibilities to shareholders and the C-suite’s sensitivity
to financial and reputational risks
► Comprehensive tax control framework in place and using technology
to track/manage tax risks
► Maintains a corporate-wide methodology for identifying and
remediating risk
► Tax has effective and structured interactions with the board of
directors and audit committee
EY Tax Agenda
 Where are you? External influences
Use the scales below to rate the maturity level of your tax function

Leading
Developing Established
► Tax team is aware of some of the latest regulatory, ► Tax team is proactively monitoring the latest regulatory, economic
► Tax is mostly reactive in the review of the latest economic and industry trends, but not always informed of and industry trends and consistently analyzes how they may impact
External regulatory, economic and industry trends and how their potential tax impact the tax function
influences they may impact the tax function
overview

► Closely monitors and responds to regulatory changes

► Ad hoc monitoring of regulatory changes ► Monitors developments related to tax, trade and data privacy, and data
► Adopts a ‘wait and see’ approach on most
► Some activity undertaken on potential changes in protection
regulatory changes
regulations ► Participates in industry groups to actively take part in consultations on
Regulatory ► Unaware of options to take part in consultations
► Usually reactive to developments related to tax, trade and potential changes in regulations
on potential changes in regulations
data privacy, and data protection ► Uses modelling tools to evaluate multinational/pan-national operating
models and tax implications

► Has a high level view on economic trends and
their tax implications but no structured analysis
► Has not determined tax implications in emerging
Economic
and developed markets
► Analyzes economic trends and related tax implications ► Analyze and consider tax impact of foreign exchange movements
► Intermittently considers tax implications in emerging and ► Regularly assesses geographical and tax implications in emerging and
developed markets developed markets
► Monitors foreign exchange movements ► Understands economic trends and related tax implications

► Has limited or no awareness of emerging trends ► Has performed some benchmarking amongst select ► Regularly conducts benchmarking exercises amongst industry peer
within industry peer groups industry peers
groups and is considered “best in class”
► Minimal benchmarking performed amongst ► Has reasonable understanding of emerging trends amongst
Industry ► Regularly vets emerging trends amongst industry peer groups
industry peer groups industry peer groups

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 Where are you? Tax function
Use the scales below to rate the maturity level of your tax function
Developing
► The various tax function components are not
Tax function
adequately integrated, do not have the necessary
overview
talent, time and budgets allocated, and are not
aligned with the overall business strategy
► In-country cash tax planning process/capabilities do
not exist or are limited
► Inappropriate amount of tax budget allocated to tax
Planning planning
► Minimal review of tax rate compared to peers
► Local finance teams prepare submissions using a
decentralized process with limited review
► Processes may be documented at a high level and are
Accounting non-standardized across all geographies
► Tax and finance work together to resolve some
issues with tax provision, tax accounts and
disclosures
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Established
► Components of the tax function are integrated, may have
sufficient talent, time and budgets allocated but may not be
aligned with the overall business strategy or achieve most
goals and objectives
► Cash tax planning strategy is performed on an ad hoc basis
only
► Consulting procedures in place for M&A committees and tax
► Periodic review of tax rate compared to peers
► HQ Tax reviews provision, interprets tax law and tax
accounting policies, leads in resolving open items and
prepares top-side adjustments
► Processes are largely documented and standardized with roles
and timing identified
► Tax reconciles and validates most current and deferred
income tax balances to start compliance activities
Leading
► All components of the tax function are globally integrated, have
optimum talent, time and budgets allocated, are aligned with the overall
business strategy and achieve the organization’s tax goals and objectives
► Proactive review of tax rate compared to peers
► Tax is fully represented in business processes and functions (e.g. M&A)
► Tax planning addresses short and long-term strategic opportunities
► Technology and data analytics are used to enable effective tax planning
activities
► Centralized process for computations in all geographies
► Fully documented review processes in place and controls are integrated
with compliance
► Regular communication and tax accounting training in place for all tax
and finance employees
► Significant tax accounting judgments and transactions are approved by
tax and finance
► Tax accounting closely coordinates with planning, compliance and
controversy to ensure accuracy of the tax reserve
EY Tax Agenda
 Where are you? Tax function
Use the scales below to rate the maturity level of your tax function
Developing
► Accountability for compliance is unclear or each
country finance/business unit exercises own
discretion in the use of internal/external resources
► Countries extract their own information from the
ERP or other local systems
Compliance ► Independent decision making on compliance
methodology and issue resolution per country
► Reactive approach to disputes and controversies
► Minimal action taken around regional and global
resources, processes and systems for tax risk
management
► Uncoordinated approach to tax controversy and risk
with little proactive tax controversy planning
► Use of a patchwork approach of professional
Controversy services companies in multiple markets
► A single tax operating strategy does not exist
► Limited monitoring of tax policies
► Tax talent development plan has not been designed
Tax
Performance
Management
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Established
► Centrally filed tax returns are available and scheduled status
reporting is provided to key stakeholders
► Compliance activities are tracked and reported, with proactive
prevention addressing late filing risks
► ERP data is extracted and validated before use
► Approach is effective in addressing most tax risks but has not
yet completely eliminated unexpected surprise issues
► Group policies and procedures provide periodic visibility to
tax function for only the most significant uncertainties in
controversy matters
► Tax strategy provides a standard approach to tax controversy
and risk at a region or country level, with limited
effectiveness
► Additional technology tools and data analytics are being
evaluated
► Most tax policies are monitored and documented
► Tax strategy is partially linked to the organization's overall
strategy and updated infrequently
► Tax talent development plan and KPIs set in accordance with
tax strategy
Leading
► Available technologies are consistently leveraged for recurring
compliance activities
► Consistent compliance process and documentation are applied and
integrated across all geographies
► ERP data is sensitized to finance and tax needs, is consistent across
multiple processes, and centrally provided for local compliance
► External suppliers are globally identified, contracted and managed
► Globally integrated, proactive approach to tax risk and controversy
management, supported across the enterprise, to Prevent, Manage and
Resolve controversy
► Manage – mitigate the impact of controversy by gaining a full picture of
risks with a global tracking platform and harness tools to proactively
manage them across multiple jurisdictions
► Prevent – stop controversy before it occurs with top-down governance,
systems and processes that enhance risk monitoring and compliance
► Resolve – utilize all available pre and post-filing resolution tools and
processes so the company can move forward
► Regular or real-time tax dashboard reflect KPIs, and data analytics are
utilized to enhance the tax function performance
► Tax policies have clearly defined governance, are Board approved and
globally applied
► Tax strategy is updated, continually monitored and aligned to overall
business strategy
► Tax talent development plan and KPIs set in accordance with tax strategy
and measured
EY Tax Agenda
 Bridging the gap – Internal influences

Impact
Identify and prioritize the actions below based on impact and urgency

Urgency
High impact, High impact, High urgency, Low urgency,
Recommended actions high urgency low urgency low impact low impact

► Align your tax strategy with your business and legal strategies following a transaction.
► Consider outsourcing business processes within your tax function
► Review how digital transformation and the digital economy will impact the tax
Strategy function
► Develop a plan to better align tax with the business and C-suite priorities
►

► Assess whether the company’s data is fit for Country by Country reporting (Action 13
of the OECD BEPS initiative)
► Review business processes to achieve potential savings
► Improve the tax function’s engagement with the enterprise around transformation
Enterprise
activities
►

► Enhance the effectiveness of the tax function with regard to managing risk and
providing governance oversight
►

Governance

© 2017 EYGM Limited

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 Bridging the gap – External influences

Impact
Identify and prioritize the actions below based on impact and urgency

Urgency
High impact, High impact, High urgency, Low urgency,
Recommended actions high urgency low urgency low impact low impact

► Determine the tax impact of changes in the regulatory environment resulting from Brexit, US tax reform or other geopolitical changes
Regulatory
► Improve the tax function’s monitoring and responsiveness to regulatory changes
► Take into account both business and tax issues when assessing US tax reform’s impact
►

► Formulate a plan to improve how the tax function addresses and responds to economic changes
►
Economic
► GENERAL: Better prepare the tax function to address and respond to industry trends
► AUTO HOT TOPIC: Align with e-mobility, digitalization and connected cars strategies and developments
► BCM HOT TOPIC: Consider taking advantage of increasing tax reporting regulations to enhance the customer experience
► CPR HOT TOPIC: Review the current operating model to determine if it is fit for purpose
Industry ► GPS HOT TOPIC: Develop a plan to address cross border tax issues in direct, indirect and reporting areas
► HEALTH HOT TOPIC: Develop a plan to address cross border tax issues in direct, indirect and reporting areas in an increasingly
globalized environment
► INSURANCE HOT TOPIC: Better streamline your global tax reporting obligations across all aspects of the tax lifecycle
► LIFE SCIENCES HOT TOPIC: Determine where to locate Intellectual Property in an uncertain legislative environment
► M&E HOT TOPIC: Analyze the value of customer data you obtain through digital transactions from local tax, transfer pricing, and BEPS
perspectives on your supply chain
► MINING & METALS HOT TOPIC: Assess the impact of Robotics and Process Automation on your tax function
► O&G HOT TOPIC: Evaluate the tax impact from digital oil field operations and core services
► P&U HOT TOPIC: Evaluate the use of RPA across the tax function
► PRIVATE EQUITY HOT TOPIC: Manage the growing compliance burden and associated risks efficiently
► REAL ESTATE HOT TOPIC: Assess impact of regulatory developments on the underwriting of real estate investments and your
organizational model
► TECHNOLOGY HOT TOPIC: Evaluate whether your global supply chain is configured for Post BEPS IP alignment and supply chain
landscape
► TELECOM HOT TOPIC: Perform economic analysis of cloud-based business model and IP ownership
► WAM HOT TOPIC: Evaluate use of robotics and process automation to capture data for the tax compliance processes
►

© 2017 EYGM Limited

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 Bridging the gap – Tax function

Impact
Identify and prioritize the actions below based on impact and urgency

Urgency
High impact, High impact, High urgency, Low urgency,
Recommended actions high urgency low urgency low impact low impact

► Develop a plan on how to best leverage data analytics

Tax ► Develop a strategy to improve managing tax data
performance ► Develop a tax talent strategy that aligns with the tax function’s KPIs
management ► Evaluate new tax technologies to improve speed, accuracy and cost
► Develop a performance management plan to improve the effectiveness of the tax function
►

► Increase your tax function’s focus on tax planning

►

Planning

► Improve your tax function’s tax accounting policies and procedures

►
Accounting

► Evaluate the use of RPA for your tax compliance requirements

► Develop an approach to improve the consistency, efficiency and effectiveness of your compliance and reporting
processes
Compliance ►

► Improve the methodology of identifying, managing and resolving tax controversy, disputes and litigation
►

Controversy

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 Notes

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