As chief tax officers manage complexity and change in tax, it’s important to take in the big picture. Geopolitical events and social trends underway today have the potential to drive the tax policy decisions of governments and the business strategies of global companies into the future. Chief tax officers should understand these developments so they can anticipate — and even influence — the potential effects on the business.
To help businesses navigate these choppy waters, tax leaders should understand how geopolitical trends might play out, what threats might arise and how exposure can be mitigated. Many companies are taking steps to manage their exposure by scenario planning — considering what’s likely, what alternatives are credible, what’s unlikely and what’s worst case — so they can chart their best course forward. Tax leaders have an important part in these endeavors to shed light on the tax angles of the strategic decisions being made.
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Global Tax Reboot aims to provide an informative and insightful analysis of important geopolitical forces at work today and how they may transform the business environment and direction of tax policy in the years to come.
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3 trends likely to reshape the global business landscape and create uncertainty
Trend 1
After decades of ongoing globalization, the international order is splintering and governments are now prioritizing safety and security over measures to promote prosperity and growth.
Trend 2
International tax is a rare area where multilateral collaboration continues, with consensus being forged over fairer, more efficient tax rules. The consensus is fragile, however, and significant divisions over some of the rules still need to be bridged.
Trend 3
Income inequality is worsening globally, leading to distrust of politicians and government, and fueling populist and protectionist attitudes.
Key takeaways for tax leaders managing through the reboot
Keep up with geopolitical forces and trends
These developments will have implications for tax policy and being up to speed can help put chief tax officers in the best position to steer their organization’s response.
Seek to build and work connections like never before
This includes: professional peers, advisers, academics and non governmental organizations to engage on emerging issues, social currents and political trends; tax authorities and policy makers to take part in tax policy debates make sure business issues are heard; and the C-suite and senior management across the company to explain the sources of tax risk and highlight opportunities.
Consider a risk governance framework
This may optimize opportunities to contribute to business strategy, build team’s profile, and contribute to business’s sustainability and success.
