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Global tax transparency and risk management

The new landscape prompts changes to operations, strategy
and budgets

Tax Function of the

Future series
Introduction

This is the second part in a thought leadership The global predictions cover six main areas:
series exploring our predictions for the Tax
Function of the Future. In our first piece, 1. Global legislative and regulatory landscape
we outlined our predictions concerning the 2. Tax function’s role in risk management
new challenges facing the tax function and and governance
why they (and other) functions will have to
adapt to remain relevant. This piece focuses 3. Data flow into the tax function
specifically on our predictions relating to global
4. Technology automation for tax function
tax legislation and regulation as well as risk
analytical tasks
management and how legislative and regulatory
change will mandate transformation. 5. Tax function roles and processes
6. The tax professional of the future.
For more information on our predictions for
the Tax Function of the Future, follow the link
below to see the first publication in our series.
www.pwc.com/taxfunctionofthefuture

1 Global tax transparency and risk management

Executive summary

The challenge Companies are voicing concern over how

disclosures of transfer pricing strategy,
The rapidly evolving global tax landscape corporate taxes paid, operational structure,
requires a critical examination of today’s and financial information to tax authorities on
tax function. For many organisations, a country-by-country basis will be interpreted
change may be needed to address and potentially misused. Further, companies
capability gaps and better manage risk. are concerned that such information may end
up in the public domain with competitive and
This article highlights how the tax landscape is reputational implications.
changing but more importantly, what changes
The most immediate and sweeping initiative
companies may need to make and how to
faced by tax functions is the OECD’s Country-
get started.
by-Country Reporting (CbCR) recommendation
and template. CbCR will have a significant
What is driving change? impact on the tax function and how it must
engage with the wider organisation to be
Enhanced transparency and disclosure of tax-
ready for initial compliance as well as meeting
relevant information are the subject of much
recurring annual obligations. Changes to the tax
debate and becoming the new standards for
function also will be shaped by other pending
business. The demand for greater transparency
initiatives under the OECD’s Base Erosion and
is reflected in the agendas and action plans of
Profit Shifting (BEPS) Action Plan as well as
the Organisation for Economic Co-operation
unilateral government actions that could upend
and Development (OECD), the G20, the
existing international tax norms.
European Union, and the United Nations.

2 Global tax transparency and risk management

Executive summary

What potential impact might What should I be thinking plan to expand their tax function capabilities,
I face? about now and what are the integrate new reporting requirements, and
opportunities? provide the business case for operational
We expect base-line tax administration and investments. While risk and compliance
other compliance burdens to expand, audits to Companies should think creatively and obligations may be the main drivers for change,
increase, and there to be enhanced controversy strategically to address these risks while there may be several positive benefits to reap
creating the potential for increased and double proactively engaging with their broader along the way such as management having
taxation. More pressure will be placed on tax organisation and potentially the public. Now is greater real-time insight due to enhanced access
functions to better manage tax and related the time for companies to create a multi-year to information.
risks by strengthening the control environment
that governs reporting processes. Overall,
the tax function will need to expand its core
capabilities relating to data, people, and
technology. In addition, due to the potential It is unclear what legislation the United States will enact going
business and reputational risks associated with
many transparency initiatives, the tax function forward relating to transparency and the broader BEPS initiatives.
will need to be more engaged with the C-suite But companies should not undertake actions simply based on
stakeholders about such issues.
their home country laws. Other countries have broader and more
divergent agendas and will continue to seek more disclosure
from multinationals.
— Dave Camp, Former Chairman of the House Committee on Ways and Means
and now PwC Senior Policy Advisor

3 Global tax transparency and risk management

Let’s dig deeper

What’s next for tax functions?

To gauge what challenges the future may hold, tax leaders should consider PwC’s predictions relative to legislation, regulation, risk management, and
governance. The following discussion highlights these predictions and potential ways to meet the hurdles head on while capitalising on opportunities.

Examples of global transparency efforts

Predictions
Global tax information reporting Mandatory disclosures to tax administrations
requirements (e.g. CbCR and similar
US Foreign Account Tax Compliance Act (FATCA)
transparency initiatives) will grow
exponentially and will have a material BEPS 13 Transfer Pricing documentation and CbCR
impact on the operations and related UK Disclosure of Tax Avoidance Schemes (DOTAS)
budget allocations within the tax function.
Mandatory public disclosures
US Section 1504 of the Dodd-Frank Act
The global transparency EU Accounting Directive
movement: Examining the issues EU Capital requirements regulation and directive—CRR/CRD IV
and challenges
Voluntary disclosures beyond statutory obligations
The list of transparency initiatives continues to
grow, with nuances and additional reporting Extractive Industries Transparency Initiative (EITI)
required for particular industries and within Voluntary CbCR disclosures
specific countries. The issue is sparking interest Co-operative compliance arrangements
from a wide group of stakeholders and comes
at a time when tax functions are strapped
Exchange of information between tax administrations
for resources.
OECD Standard for Automatic Exchange of Information in Tax Matters
EU exchange of cross-border tax rulings/APAs

4 Global tax transparency and risk management

Let’s dig deeper

In the United States, companies experienced

enhanced disclosure requirements with FATCA For multinationals the deadline is imminent
and reporting of uncertain tax positions. Now,
CbCR and other transparency initiatives can The G20 countries have agreed to implement (by legislation or administrative processes) the
create a very complex and challenging tax recommendations of the OECD’s June 2015 guidance. For the jurisdictions that implement the OECD
environment around the world, which will be guidelines, their domestic law should adhere to the OECD transfer pricing documentation (i.e. Master
difficult to manage. However, there is debate File, Local File, and CbCR) for fiscal reporting periods beginning on or after 1 January 2016.
in the United States about implementing
Under OECD recommendations, the first CbCR report must be filed by December 2017 for the fiscal
CbCR (i.e. Congressional concerns). Even if
year-end reporting period that will begin on or after 1 January 2016, although it is important to
certain territories do not adopt CbCR into their
note that actual filing requirements will be based on the law that each territory enacts.
domestic legislation, multinationals will still
need to comply at the subsidiary level with local
laws. For example, a US-based multinational
should consider that Spain has enacted
CbCR regulations consistent with the OECD’s
recommendations and thus their Spanish
subsidiaries must comply.
In addition, the OECD’s revised transfer
pricing guidelines will require access to and
reconciliation of information that may not
currently be readily available within the
organisation. It is expected to result in reporting
and operational burdens and uncertainty as to
how companies should build their processes to
meet the required compliance obligations.
= G20 countries

5 Global tax transparency and risk management

Let’s dig deeper

Responding to new requirements Companies should not defer engaging in a

with a ‘dry run’ ‘dry run’ but instead, act now to prepare. It Using a dry run to create a
inevitably takes longer than expected to line
Given the December 2017 deadline for filing up technology solutions and processes as many
new process
the first CbCR reports, companies should will involve and impact other functions in the • Analyse your company’s CbCR readiness,
stage a ‘dry run’ in completing the requested organisation such as IT, accounting, and the
information to test the quality of data sources, including:
broader finance function.
the ease of obtaining data, the accuracy of the – identifying the variety of data sources in
results, and what impact disclosure may have specific detail
from a risk perspective. The ‘dry run’ should
reveal operational, information, and technology Companies should target the – determining how the organisation will
gaps as well as what actions are needed to implementation of specific define specific elements to be reported, and
address such ‘blind spots,’ for example: changes to operations and – designing the review and reconciliation
• documenting positions or rethinking legal processes prior to the beginning of steps within the reporting process that
entity structures Tip the reporting period (1 January leverage current work flows, thereby
• analysing data to identify 2016 for calendar-year taxpayers reducing overall effort
consolidating entries in some jurisdictions). They • Test the new process and then analyse the
• combining multiple sources of data should engage the CFO and others results against expectations
• filtering at a transaction level for certain in the C-suite with a clear message • Determine who will be responsible for each
elements within an account. of the reporting and disclosure aspect of the process.
requirements and readiness • Does the new process address the
plan—its impact, approach, ‘blind spots’?
and timeline—and requests
for sponsorship, resources,
and funding.

6 Global tax transparency and risk management

Let’s dig deeper
The level of effort for companies to comply with CbCR will vary
High
Low

Level of effort required

Scenario: Low effort Scenario: High effort
Complex sources of data with
Financial data Employee Statutory significant manipulation required
sources detail ledgers
within ERP within ERP
identified system

Most companies will

Accounting Data Hub to Potential
reporting tools fall between these bring sources reconciliation
leveraged two scenarios of information
to extract together
information Consolidation Consolidation

CbCR Local CbCR Local

Analytics Analytics
reporting country filing reporting country filing
Accounting analytics Acquire analytics
tools enabled for capabilities to predict/
CbCR results manage results

Some companies may view CbCR as another compliance activity that could be outsourced to a third party. However, the nature
of the data being gathered and validated demands the continued and time-intensive involvement of companies themselves. A dry
run will bring to light the amount of time and the resources required in the data gathering process—a key step that is difficult to
outsource to a third party.

7 Global tax transparency and risk management

Let’s dig deeper

Notwithstanding CbCR, there are other imminent Examples of tasks to perform now to help manage
difficulties for taxpayers relating to BEPS: these concerns—all requiring technological and
analytical capability:
• Ensure proper reporting of the company’s profitability and value
chain profile • Engage in a value contribution analysis—review the core competencies
• Pressure on historical single-sided tests for transfer pricing purposes, of the organisation, its competitors globally, and where profits are
such as the comparable profits method and transactional net generated as compared with those competencies
margin method • Bolster global transfer pricing documentation to meet evolving
• Strong bias toward disregarding the role of capital and risk in favor requirements—consider a single documentation source that is used
of people functions and the use of profit-split methods for transfer worldwide, along with a technology solution to enable consolidation of
pricing purposes data, collaboration, tracking of responsibilities, and document storage

• Tax authority assertions regarding the existence of local intangibles • Strengthen the tracking of mobile employees to help manage PE risks,
that would attract income leveraging technology tools rather than manual methods to capture
data more efficiently
• Increased risks of re-characterisation and permanent establishment
(PE) income attribution
• Changes to financing rules requiring companies to rethink their
financing strategy

8 Global tax transparency and risk management

Let’s dig deeper

In response, the C-suite may create new key

performance indicators and management
Predictions reports relating to the transparency issue.
Enhanced stakeholder scrutiny and reputational risk will force companies to continuously In certain situations, the senior leadership’s
re-evaluate their tax decisions. involvement may be mandatory. As an
example, the UK tax authority has recently
Regulators will demand transparency regarding global taxation, necessitating clear and
issued a consultation on the introduction of
thoughtful communications with public stakeholders about corporate contributions to the
a requirement for a large business to publish
communities in which they do business.
its tax strategy for activities that relate to or
affect UK taxation. Evidence to demonstrate
the application of the tax strategy in practice
The C-suite’s growing involvement Important areas for discussion with the C-suite must be part of this reporting. The consultation
include the organisation’s risk profile: also proposes that the tax strategy must be
Increasing transparency with respect to global
owned and signed by a named individual at the
reporting is raising concerns that rise to the • How will executives engage to take a more
executive board level.
C-suite level. These include the reputational proactive approach to taxes and transparency?
impact of making tax information available to • How do they plan to adhere to reporting
a broader population and the potential that requirements while at the same time
Corporate boards are engaging
competitors will have access to supply chain protecting—or even enhancing—the more regularly on tax matters
and business operation information. While company’s reputation? reflecting the increased
the current transparency push relates more to
• Since the company’s core values apply to business risk associated with a
private disclosure like CbCR, there is a growing
trend for more public disclosure of this same all activities within the organisation, are Tip company’s tax strategy. Along
information. executives prepared for the way increased with gathering information for
reporting could reflect on them?
reporting purposes, additional
• Are they also prepared for the risk associated processes will be required to
with greater public disclosure?
analyse the potential business
and reputational impacts in
advance of making tax decisions

9 Global tax transparency and risk management

Let’s dig deeper

The increasing in uence of tax on

external communication strategies
Businesses should be prepared to communicate
tax-related information to governments,
regulators, investors, and the public. The
C-suite, as well as public and investor relation
teams, and finance need to address a growing
public perception that multinational companies
are not paying their fair share of taxes.
It will be important to establish and maintain
a formalised approach to communication that
delineates participants, roles, channels, format
and frequency between departments (e.g.
the tax function, public relations, and legal).
Outside advisors can be helpful in providing
peer and benchmarking insight into formulating
communication strategies.

Companies should analyse whatever perception or Shell believes that greater transparency about the
substantive gaps exist between their stated core values payments we make can help build trust between
and overall tax strategy and disclosures, as well as
our business and the communities where we
identify opportunities to highlight overall contributions—
Tip including all tax payments—to society. Companies may work. This is the fourth consecutive year that
also want to consider consistency between communication Shell is voluntarily publishing tax payments. In
strategies, e.g. if the business is publishing their 2014, this amounted to over $90 billion.
sustainability strategy, companies should understand
— Simon Henry, CFO, Royal Dutch Shell plc.
how it could impact their tax strategy.
10 Global tax transparency and risk management
Let’s dig deeper

Tax authorities expect companies to have the

technology to do so at their fingertips, but for
Predictions the overwhelming majority of companies this is
Information sharing will be commonplace among taxing jurisdictions, and taxing authorities still far off.
will have the capability to mine data and conduct global audits, resulting in increased disputes. Meanwhile, tax authorities continue to develop
Strategic focus on jurisdictional reporting and documentation of business activities, including their own analytics and data mining capabilities
transfer pricing, will be critical to managing the increased tax controversy resulting from to more effectively analyse data and target
transparency initiatives. specific areas for scrutiny. The data requested
from taxpayers is increasing in granularity.
Information collected under CbCR could be
the single largest trigger of audits and disputes
Number and size of tax audits and The potential for complex tax disputes and going forward and a significant worry to
controversies will increase double taxation increases as countries enact companies is that governments may not have
unilateral base erosion and profit shifting clear guidance and frameworks on how agents
As cross-border commercial transactions occur legislation. There is also a growing divergence should use the data.
more frequently, identifying where profits of expectations between tax authorities and
are attributable will be harder to determine. taxpayers as to the latter’s ability to gather and
provide audit-relevant data.
The OECD has recently released mutual
With the escalation of controversy in the international tax arena, agreement procedure (MAP) statistics that
show the highest pending inventory of MAP
companies will face far greater exposure to double or multiple taxation
cases in history and a 94% increase since
of the same income. Tremendous pressure will be placed on the mutual 2006. These statistics reflect the surge in tax
agreement procedures, which are designed to eliminate that exposure. audits and treaty related disputes among
With the unsettling of established principles and a lack of widespread OECD member countries over the last eight
years. Changes under BEPS could lead to an
use of arbitration to resolve cases, we could see a chaotic, threatening
even greater increase.
environment very soon.
— Mike Danilack, PwC partner, former IRS Deputy Commissioner (International)
11 in the Large Business and International Division Global tax transparency and risk management
Let’s dig deeper

Using proactive approaches • Re-evaluating global audit and controversy

to address tax audits and roles, responsibilities, and information
controversies flows within the company to manage tax
positions more consistently, efficiently share
Some companies wait until audits and data and document audit responses, and
disputes are underway before developing assess potential impacts to earnings. A one-
documentation. That approach generally stop global portal can connect individuals
consumes significant resources and time. across core functions and business teams
Often the requested information is not readily while employing proper security and access
available. And, in some cases, local country measures. The adoption of these tools by
income tax filings are completed in an ad hoc companies is steadily growing.
fashion, using ‘best available’ information
that may not be fully reconciled to source
information or other reports. In appropriate situations, early,
Instead, companies should take a holistic view of
upfront communication and
how audits and controversies could impact the negotiation with tax authorities
tax function. Pre-emptive measures now can help can provide certainty for
companies avoid surprises and better manage Tip taxpayers, reducing future audit
resources. These include for example: risk. Advance pricing agreements
• Enhancing processes or implementing (APAs) are one example of
technology tools that can track audits so tax beneficial negotiation expected to
function management can have full visibility see greater use by taxpayers.
to the number, status, and depth of inquiries
globally.

12 Global tax transparency and risk management

Let’s dig deeper

Enhanced focus on reconciliation As a large, global company we are familiar with the level of
Taxing jurisdictions will be able to share scrutiny applied by tax authorities around the world regarding tax
more detailed tax data with each other as disclosures. We welcome a globally consistent, standard approach
transparency initiatives increase. As a result,
taxpayers must be able to reconcile information to the reporting of revenues, profit and income taxes paid. However,
between external, consolidated financial, tax, there will always be variances between jurisdictions in terms of
and local statutory reporting. They must also
demonstrate that new filings (such as CbCR) are how they interpret global requirements, which leads to additional
accurate and consistent on a global basis. compliance costs and potential for increased disputes and double
For organisations that have decentralised taxation where the data is inconsistent.
management or multiple ERPs (or varying
instances of the same ERP) more effort may —Ross Lyons, Global Head of Tax, Rio Tinto
be required to gather the data and test it for
accuracy, both at the time of filing and when
an audit arises. To address this problem,
documentation of end-to-end processes should The need for ongoing The data needed for ongoing analytics is often
be undertaken to identify information technology analytics capability not easily accessible, requiring tax functions
investments that will be needed (e.g. a data hub to spend significant time and effort manually
Transparency initiatives are mandating that gathering and manipulating data for reporting
to efficiently gather, store, consolidate, reconcile
companies engage in more ongoing review needs. However, today’s technology and data
and report this information).
and analysis. CbCR is only one of three parts of analytics capabilities provide a variety of options
the new OECD guidelines for transfer pricing to improve reporting and documentation, enable
documentation delivered under BEPS Action 13. greater control and access to information, and
The Master File and Local File should be viewed harness creative ways to make sense of large
as critical companion reports to the CbCR volumes of information.
template and need to be updated on a regular
basis to ensure consistency and accuracy. Tax
authorities will be looking to these documents
to rationalise the results under CbCR as a
starting point for transfer pricing audits.
13 Global tax transparency and risk management
Let’s dig deeper

Predictions
Many jurisdictions will legislatively require the adoption of a tax control framework which follows guidelines similar to Sarbanes-Oxley and the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Growing reliance on tax control The global transparency trend is not necessarily just a one-way
frameworks to manage tax risk street for tax authorities to reap the benefits. Tax functions can
The emphasis on tax control frameworks in leverage voluntary disclosure initiatives like co-operative compliance
helping companies manage tax risk is gaining
momentum globally. The Australian Tax Office arrangements to gain greater certainty and reduce their own
recently stated that the presence of a robust tax administrative burden. Under such programs the taxpayer needs to
control framework will be taken into account
when determining a company’s risk-assessment
be able to confirm by means of a tax control framework, that tax risks
score. Other recent developments include so- are appropriately managed and information and returns submitted
called horizontal monitoring in the Netherlands are accurate and complete.
and the Senior Accounting Officer regime in
the UK. These changes enable tax authorities —Eelco van der Enden, PwC partner and Global Tax Administration
to give more attention to those taxpayers that
Consulting Leader
are deemed higher risk. As a consequence,
more companies outside the United States are
reviewing their internal controls relating to key
tax processes (akin to Sarbanes Oxley in the
United States). This review is not just relating to
corporate income taxes, but all taxes.

14 Global tax transparency and risk management

Let’s dig deeper

Currently the OECD Forum on Tax

Administration is working on a guide regarding Inspired by COSO, a well-managed tax control framework will
tax control frameworks for multinational consist of:
enterprises and tax administrations. The guide
will outline the essential features of a functional
Business and tax environment Tax risk management
tax control framework and recommendations
for the tax authorities as to how to approach its A company’s priorities and risk profile. Responsibilities for the management and
assessment. Once released, it is expected to be Special attention should be paid to strategy, mitigation of key risks must be clear and the
used as guidance in 45 OECD and non-OECD i.e. strong tax governance to be coupled governance process documented.
member countries of the Forum and other with an agreed tax strategy.
jurisdictions.
Business operations Monitoring and testing
The state of a tax control framework can be
assessed against various levels of maturity: An understanding of and alignment with Confirmation that a company’s tax control
initial, informal, standardised, managed, the full range of a company’s business framework actually works; process should
and optimised. Once a company identifies operations and transactions. be subject to regular monitoring, testing,
its current and desired maturity levels, it can and maintenance (for example, by Internal
assess relevant gaps and design a roadmap. Audit or Risk Management).
The roadmap includes objectives, time frame,
responsibilities, and how technology will be Tax operations Tax assurance
used to fill those gaps. The more technical aspects of tax within Assurance as to the quality of a tax control
a company, i.e. monitoring the tax framework to internal (C-suite executives,
ramifications of legal entity structures and corporate finance) and external (auditors,
business transactions and their alignment tax administrations) stakeholders. This
with the tax strategy. Focus on tax may be performed by either internal or
accounting and compliance, including the external auditors.
technological infrastructure (e.g. data and
workflow management).

15 Global tax transparency and risk management

Getting started…creating a roadmap for change

Understanding where you are and Understanding how the tax function relies on Capitalise on the opportunity for
where you need to be, along with a other functional groups (and vice versa) is also a change—set the stage for success
detailed plan to arrive there key input to the roadmap to drive solutions that
streamline the full end-to-end processes of the With foundational change comes opportunity to
Tax transparency and increased regulatory tax function. And, the level and need for change right-fit, right-size, and invest strategically, thus
burdens should be catalysts for change. will vary depending on the nature and number setting up the tax function to be more flexible,
Although other factors may be present, these of regulatory obligations (e.g. some industries agile, and responsive as the tax environment
trends are pushing companies to re-examine may be treated differently such as mining and continues to evolve. Identifying and planning
how they are managing tax matters. Most financial services). for efficiencies and opportunities that can be
companies acknowledge that the status quo in achieved will help measure the potential returns
their current tax and supporting governance on upfront costs in technology, process, and
functions is not an option; at the same time, resourcing improvements.
many remain unsure as to how to tackle the
emerging challenges.
Formulating a detailed, realistic, and We see the broad impact transparency initiatives have on the tax
customised transformation roadmap is the function, but more importantly also on the wider organisation.
first step—and begins with a full assessment
of the company’s current state through a Tax is increasingly being embedded in the business and needs to be
gap assessment. This detailed analysis of approached more and more holistically with a broadly supported tax
the tax function’s capabilities, strengths and
weaknesses, and risks relating to governance, awareness throughout the organisation as a basic requirement. Said
process, technology, people, and legal entity initiatives (e.g. CbCR) will, as a positive spin off, expedite this process.
structure, is a critical tool to identify needed
operational improvement, existing risks, and —Niels Tromp, Head of Tax, ARCADIS
how to manage them.

16 Global tax transparency and risk management

Getting started…creating a roadmap for change

For tax functions that have

In addition to tackling compliance and risk management obligations, struggled to obtain funding for
the transformation process may also generate opportunities that IT and other improvements, the
may be worth capturing: mounting volume of compliance
• Obtain greater usage of organisational investments in ERP and Business Intelligence systems. Tip requirements should serve as a
• More upfront awareness through better controls and governance of potential impacts to launch pad to streamline their
earnings. overall data collection, apply
analytics tools, and embed
• Leverage enhanced access to information to gain more real-time management insight (e.g. the
ability to monitor the workflow progress of staff).
controls to manage risk and
enable reconciliation. This is an
• Participate in broader financial transformation initiatives to strengthen relationships and day-
opportunity to create a platform
to-day information flows with other core functions.
for broader reform of the tax
• Bolster the tax function’s reputation within the organisation as innovative and best in class by function to facilitate greater
strengthening its capabilities (e.g. to provide more value-add support for business planning).
flexibility and enable it to support
• Use this enhanced reputation to attract more world-class talent. the business more effectively and
efficiently in the long term.

Tax functions should focus on the broader benefits of responding to new challenges by evolving
into a more strategic contributor to the business. It’s an opportunity to further enhance the tax
function’s stature within the organisation by using technology, information, and capacity for
analytics to contribute to the overall corporate vision and business strategy.

17 Global tax transparency and risk management

Predictions

Global legislative and regulatory • Strategic focus on jurisdictional reporting • The vast majority of tax functions will rely
landscape and documentation of business activities, on professional data analysis tools to assist in
including transfer pricing, will be critical the decision-making process in areas such as
• Global tax information reporting requirements to managing the increased tax controversy detection of risk, opportunity identification,
(e.g. CbCR and similar transparency initiatives) resulting from transparency initiatives. projections and scenario planning, and overall
will grow exponentially and will have a business support.
material impact on the operations and related Data flow into the tax function
budget allocations within the tax function. Tax function roles and processes
• Regulators will demand transparency • The majority of tax functions will receive all
regarding global taxation, necessitating clear information in a ‘tax-ready format’ from either • Most global tax preparatory compliance and
and thoughtful communications with public their enterprise-wide financial systems or a reporting activities, including data collection
stakeholders about corporate contributions to dedicated tax data hub. and reconciliations, will be performed within
the communities in which they do business. • Dedicated tax data hubs will become the company’s shared service center or will be
mainstream and be developed internally, co-sourced with a third party.
• Information sharing will be commonplace
among taxing jurisdictions, and taxing licensed from a third-party vendor, and/or • Tax functions will use real-time collaboration
authorities will have the capability to mine accessed through an accounting firm as part of tools to automate their workflow, document
data and conduct global audits, resulting in a co-sourcing arrangement. management, calendaring, and internal
increased disputes. • Data security will be high on the agenda of tax controls.
functions due to concerns over confidential
Tax function’s role in risk management information being inadvertently released or The tax professional of the future
and governance shared publicly. • A successful tax professional of the future
• Many jurisdictions will legislatively require will be highly proficient in data analysis,
Technology automation for tax function statistics, and technology, as well as process
the adoption of a tax control framework analytical tasks
which follows guidelines similar to Sarbanes- improvement and change management.
Oxley and COSO (Committee of Sponsoring • More companies will use their enterprise-wide • Tax functions will employ dedicated tax IT,
Organizations of the Treadway Commission). financial systems to prepare tax calculations data and project management specialists who
• Enhanced stakeholder scrutiny and (e.g. income tax accounting and indirect will develop, champion, and execute the tax
reputational risk will force companies to taxes), thereby replacing spreadsheets and/or technology and transformation strategies.
continuously re-evaluate their tax decisions. traditional tax technology solutions.

18 Global tax transparency and risk management

Let’s talk
Look for future publications exploring the Tax Function of the Future

To have a deeper conversation about how these issues and predictions may affect
you and your business, please contact:
Andrew Wiggins Joaquín Latorre
Michael Shehab Global Tax Accounting Socio de PwC Tax & Legal Services
US Tax Reporting & Services Leader [email protected]
Strategy Leader [email protected] +34 915 684 418
[email protected] +44 (0)121 232 2065
+1 (313) 394 6183
Santiago Barrenechea
Carsten Rössel Socio de PwC Tax Legal Services
Global Tax Reporting & Tax Reporting & Strategy
Global Tax Reporting & Compliance Leader [email protected]
Strategy Leader [email protected] +34 915 684 406
+49 211 981-7141
+44 (0)20 7212 2527
Francisco González Fernández-Mellado
Eelco van der Enden Director de PwC Tax & Legal Services
Giovanni Bracco Global Tax Administration Tax Reporting & Strategy
Global Tax Strategy & Consulting Leader [email protected]
Operations Leader [email protected] +34 915 685 532
[email protected] +31 (0)88 792 5138
+44 (0)20 7804 4059

Todd Bixby
Global Tax Technology Leader
[email protected]
+1 (612) 240 1602

www.pwc.com/taxfunctionofthefuture
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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