How does your tax function stack up?
Seasoned private company tax leaders make key decisions every day to evolve their tax function and keep pace with unprecedented pressures, disruptive technological advancements, heightened compliance obligations and more — all while seeking to demonstrate value within the organization and beyond.
Benchmarking against comparable private company tax functions can be a powerful tool for reflecting on your organization's current position and planning how to prepare for the future. To help, KPMG International conducts an ongoing survey of the tax functions in multinational organizations around the world. The data gained offers insights into tax functions globally and how they are evolving in their structure, governance, priorities and performance measures, through the use of technology and more.
In this special focus report, we take a deeper dive into private company tax functions and how they are evolving in their structure, governance, priorities and performance measures, through the use of technology and more.
International tax reform and surging M&A activity are the two biggest disruptors affecting the tax functions of private companies today. Advancing technology also poses challenges, particularly due to a lack of IT support for new or evolving requirements and changing finance/technology systems. Most private company tax functions still fall within the finance function, although a significant proportion are independent. Only 3 percent of private company heads of tax report to the CEO directly.
Shifts in the tax function
Most private company tax functions still fall within the finance function, although a significant proportion are independent. Only 3 percent of private company heads of tax report to the CEO directly. Survey results confirm a shift in tax functions’ priorities from reactive compliance to risk reduction. More private company respondents said their tax function’s primary strategy is most closely aligned with risk reduction than those who said their strategies are aligned with value creation or effective business partnering.
Private company tax leaders are starting to see the benefits of tax transformation projects, including shorter cycle times, reduced tax costs, fewer errors and better compliance. For success, however, it appears that effective change management is essential.
In the next 5 years, most companies expect to increase their number of fulltime employees (FTEs), as well as their use of co-source resources from shared service centers, global business services or centers of excellence.
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