Tax transformation trends survey

Operations in focus

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation. The Tax operations in focus study highlights the first of a three-part tax leader series. Each study will review and reflect the leadership insights of global tax and finance executives at global companies as they share their strategic perspectives on tax operations, talent and technology.

Trend 1

Businesses seek more strategic counsel from tax
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Trend 1

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation—which is taking them into uncharted tax territory. Tax leaders said that their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on and, accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

Trend 2

Tipping point for resourcing models
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Respondent data indicates that work is being moved to a combination of shared services centers, finance departments and outsourcing providers.

Trend 2

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments and, outsourcing providers that have invested in best-in-class technology. Deloitte’s prior historical tax and finance leader survey data shows shows a dramatic shift of compliance work out of group tax teams between 2019 and 2021, as resourcing models hit a tipping point. This trend looks set to continue, but tax leaders must plan with foresight, to ensure they retain the right expertise to meet the demands of the changing policy landscape.

How compliance and reporting activities are being primarily resourced
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In the examples below, we highlight the migration of transfer pricing documentation and indirect tax returns that has occurred over the last two years, but a similar trend can also be observed in relation to global tax provision, corporate income tax returns and statutory accounts.

Trend 3

Digital tax administration is moving faster than expected
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Trend 3

In addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernise operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

Trend 4

Data simplification and lower-cost resourcing are top priorities
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Trend 4

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritised if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

Trend 5

Skillset needs are shifting
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Trend 5

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned—data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals with their different backgrounds, can work together collectively to unlock lasting value.

Trend 6

2020 brought productivity improvements
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Trend 6

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

Operate with dynamic control in tax and finance

Explore the full report results for the Deloitte tax operations in focus study, the first of our Tax transformation trends survey series.

DOWNLOAD THE FULL REPORT (PDF)

About the research

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About the research

This tax operations-focused research is the first of a three part series Deloitte is producing in 2021 and 2022, engaging tax and finance executives at companies to understand their strategies for tax operations, talent and technology.

For this first report, we collectively surveyed 304 senior leaders—including over 100 heads of tax and CFOs—at a range of companies across industries operating in 5 or more countries across Europe, North America and the Asia-Pacific region, to understand their future vision for the tax function and how they plan to get there.

We know that making tax digital is on the horizon for corporation tax, for instance, so we need to ensure we’re looking ahead at those trends within the design process so that we can future proof ourselves as much as possible.

Joanne Walker, Group Tax Director, BT Group plc

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