Transform to Perform Tax Transformation: What does it mean to you? Nathan Andrews, Partner Carl Mallios, Partner Allison Matthews, Senior Manager Deloitte

Transform to PerformTax Transformation: What does it mean to you?

Nathan Andrews, PartnerCarl Mallios, PartnerAllison Matthews, Senior Manager

Deloitte Tax LLP

May 1, 2015

Trends in tax transformation

3 Tax Executives Institute – Charlotte Chapter Copyright © 2015 Deloitte Development LLC. All rights reserved.

Why tax? Why now?


Tax considerations can be pivotal in strategic business decisions

Accelerating globalization

Tax risks are growing due to changing tax laws in multiple jurisdictions

Growing business complexity and regulation

Commercial tax applications have come of age, enabling wholesale process change

Evolution of tax applications

CFOs expect tax executives to do more with less

Evolution of the finance function

New competitors, markets, and business models are driving need to grow top line

Intensifying competition

Tax departments require personnel with advanced technology and business skills

Increasing need for diverse talent


Focused vs. integrated transformation


Global Tax Strategy

Development and Execution

TaxAccounting

C-SuiteCommunications

In-CountryTaxation

Finance/Capital

Structures(Treasury Support)

IndirectTax

Risk andControversyManagement

RegulatoryCompliance

Customs

Tax ResourceManagement

TransferPricing

Emerging expectations


How can tax create value?

The way forward

Gainefficiencies

Managerisk

BoostEPS

Tax departments tend to be the

largest consumers of financial data

Regulatory complexity and

increased scrutiny add pressure to

global compliance and reporting

burdens

As a rule, taxes represent

the single largest expense on P&L after cost of sales


Expanding the role of the tax function

What is the transformation?

Traditional role

Derived from Deloitte stakeholder interviews, including over 70 CFOs, in preparation for Deloitte Tax Executive Transition Labs™.

Enhancing the tax function for greater impact

Strategic partnering across the organizationReporting

Planning

Managing

Emerging additional

expectations

The company’s

tax & finance profile

Process, technology,and data management

People Sustainability and efficiency

Collaboration Clear communication

Leading strategic initiatives


Taxfunction

Enhancing the tax function for greater impact


People

Process, technology, and data

Sustainabilityand efficiency

• Establish global tax processes

• Integrate technology across business functions

• Access data for increased efficiency and effectiveness

• Maintain qualityof data used by Tax

• Meet heightened expectation of sustainabilityand efficiency in traditional roles

• Determine appropriate sourcing mix: in-house, outsource, offshore, shared service center

• Implement succession planning

• Consistently reduce cost of global tax function

• Deliver high quality at low cost in mature areas

• Align with statutory accounting

• Increase Tax partnership across the enterprise


Strategic business partnering across the organization


Expanded responsibilities for Tax require close collaboration with every facet of the business in order to understand and gain alignment with the overall business strategy

Articulating a confident, concise, and compelling value proposition for an integrated and well-funded Tax and risk management function to a non-tax audience

Leads projects across functions that align with the company’s vision, while maintaining line of sight throughout the organization

Collaboration Clear Communication

Leading Strategic Initiatives

The way forward


Critical enablers to successful transformation

Transformation enablers

• Fully leverage existing technology

• Integrated systems versus point solutions

• Integrated data requirements

• Embedded reporting

• Bolt-ons

• Accommodating Business Model Optimization structures

• Addressing time consuming or problem areas

• Operating models

• Focus on cost reduction

• Tax professionalsof the future

• Demonstrating value of the Tax department

• Tax Risk Intelligence

• Tax in the board room

• Data analytics

• Knowledge of the business

• Collaboration with the business

• Alignment with business strategy and priorities

• Communicationof risks

Data and technology

People and organization

Risk framework

Business partnering


Opportunities to transform vs. react

Operational Transfer Pricing

Business Model Optimization

Integrated Tax Systems

Tax Data Management

Organizational Design Sourcing

Tax Technology Architecture


Taking action to transform

Prioritize: Validate the competency model for your department and assess your effectiveness across four key enabling areas. Identify opportunities to improve your performance or create more value for the organization.

Assess your effectiveness

Understand perspectives and expectations

Focus: Gain insight into perspectives from external stakeholders and your direct reports to calibrate expectations and understand opportunities for transformation and alignment

Define your visionFocus: A shared vision of key characteristics that define your department in 3-5 years.

Develop initiatives and mobilize

Mobilize: Dig into root causes and identify potential approaches to address high priority competency areas. Develop an action plan with key milestones and owners.

Prioritize opportunities

Prioritize: Consider your vision for the future Tax department and select a subset of priorities (competencies and/or enablers) to focus on based on the potential value to the organization.

Confirm your commitment

Mobilize: Identify areas of confidence and concern relative to executing against your initiatives. Commit to specific actions as individuals and a team to move toward your vision.

1 2

3

6

5

4Transform


Building a business case

Alignmentand scope

Analysis ValidationValue

discovery

• Review, validate, and finalize business case with stakeholders

• Present findings to finance executives and project sponsors

• Establish understanding of tax alignment process

• Agree on approach and scope of tax business case

• Develop and prioritize a list of potential value areas and pain points

• Broad-based review of tax processes, workpapers, filings, and tax planning

• Conduct workshops

• Estimate value of potential benefits

• Develop solution recommendations and overall value proposition

• Refine business case and benefit estimates

• Prepare business case presentation

Questions and answers


About this presentation

This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

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Transform to Perform Tax Transformation: What does it mean to you? Nathan Andrews, Partner Carl Mallios, Partner Allison Matthews, Senior Manager Deloitte