Deloitte recently announced the launch of its 2023 Tax Transformation Trends survey, a biannual effort which details sentiments from more than 300 senior global tax and finance executives and examines how tax departments are undergoing fundamental transformation in response to today’s challenging legal and regulatory landscape.
To respond effectively to increasingly complex changes – including OECD Pillar Two requirements and the rise in indirect taxes around the world – tax departments will need both access to accurate and timely tax-related data across their company’s global operations and the ability to work with tax teams that have data management and technology expertise.
Five Top Key Trends of Report
These are some of the key themes that emerged from Deloitte’s 2023 Tax Transformation Trends research, which included a global survey of 300 senior tax and finance executives together with a series of qualitative interviews with the heads of tax at large multinational companies
Trend 1: Holistic data management and integrated systems are required for insight-driven global compliance
Holistic data management and integrated systems are required for insight-driven global compliance
The importance of complying with a changing tax environment was reflected in the challenges that tax departments are expected to face over the next three to five years, with complying with evolving tax laws and regulations around the world (43%) being cited most often.
Trend 2: Costs and efficiency are still important, but not the top priority for tax transformation efforts
Costs and efficiency are still important, but not the top priority for tax transformation efforts
Although responding to changing tax laws and regulations has moved to the top of the agenda for many tax departments, achieving greater efficiency remains an important objective. When asked about the priorities for their tax department over the next three to five years, 31% of respondents cited increase the efficiency/reduce the operating costs of the tax department
Trend 3: Outsourcing is a prime strategy to access technology capabilities
Outsourcing is a prime strategy to access technology capabilities
Outsourcing has long been recognized as a tool for increasing efficiency, but access to technology tools is now an even more important driver. Respondents cited access to the latest technology capabilities (54%) even more often than reduced operating costs (51%) as a major or significant benefit of outsourcing an entire activity or function in the tax department. Reduced need for capital investment in technology (45%) was also named as an important benefit.
Trend 4: Tax isn’t just done in the tax department anymore
Tax isn’t just done in the tax department anymore
There has been a notable trend, at least since 2016, to move key tax activities outside of the tax department, either to other functions within the company or to third-party providers. When asked about their company’s most important strategies to achieve a lower-cost operating model, respondents most often named implementing/increasing use of shared service centres (53%), migrating activity out of the tax department to other teams within the business (48%) and third-party outsourcing (40%). All three of these strategies have increased compared to 2021 survey findings.
Trend 5: Future skills requirements are giving rise to the 'hybrid tax professional'
Future skills requirements are giving rise to the 'hybrid tax professional'
As tax departments reorganize and adapt to the changing legal and regulatory tax landscape, they need to develop professional teams with the new skills required, especially data management and technology expertise. When asked where their tax department will have the greatest need for skills over the next three to five years, respondents most often named data analytics, data-driven strategic insights, and data management (44%)—a reflection of the growing importance of data-driven decision making and increased government requirements for direct access to companies’ tax data.
