Achieving global tax compliance is an increasingly complex challenge according to 60% of respondents to BDO’s Global Tax Outlook research. They rank ‘staying compliant, given increased demands to submit more detailed tax information’ as a top three tax issue facing their organisation. Listed companies are particularly concerned about staying compliant and being involved in costly tax disputes. These findings reflect the increased scrutiny from investors and customers as well as governments and regulators. We also know that compliance breaches can be costly both in terms of fines and damaged reputation.
68% of respondents also cite ‘keeping up with new regulations/legislation’ as one of their top three priorities facing their tax function. There is clearly an ongoing challenge for firms to keep up with evolving tax rules and regulation. These responses suggest that achieving and maintaining high visibility of their current tax compliance status is a major challenge for larger multinational corporations.
How outsourcing can solve the global tax compliance challenge?
The goal for global companies with local operations has to be optimising and streamlining processes and reducing unnecessary steps. Another key to success is to introduce a single reporting platform. An outsourced tax compliance specialist can help you achieve these goals and deliver the assurance you need cost-effectively.
The first advantage is that your in-house management team have a single point of contact for all compliance matters. They only need to have one conversation to communicate a change in policy affecting compliance activities around the world – whether concerning a new transfer pricing policy or the removal of a director from multiple subsidiary boards.
Working with an outsourced tax compliance provider will enable you to create an effective compliance framework. This will establish processes for managing and reporting on local compliance activity. It will clarify key performance indicators reflecting your management team’s priorities, such as the timeliness and accuracy of tax filings. These KPIs will provide your central teams reassurance about performance levels and the effective management of compliance risks.
Implementing a centralised reporting platform, supported by your outsourced compliance provider, will offer your central team a real-time view of the tax compliance status of all local operations and the ability to easily monitor progress on compliance tasks.
If your tax compliance provider is part of a wider accountancy and advisory firm, your team can also access the insights and practical advice that global expertise brings. This is where understanding the difference between a platform or technology provider and real tax expertise is important.
A coordinated outsourced compliance service also gives central management access to local eyes and ears monitoring and managing detailed compliance changes. Developments and impacts are fed back through the central channel in an efficient and coordinated way. This combination of local expertise and knowledge with central coordination delivers effective and efficient compliance risk management.
Outsourced compliance for better tax strategies and increased influence
By outsourcing global and local compliance, central management teams win back precious time to focus on strategic issues and decisions. They are no longer distracted by the detail of multiple local compliance activities. We know from our global research that tax leaders aspire to move from running a back-office function to becoming true business partners influencing commercial decisions.
Global compliance requirements must be handled effectively and central tax teams need visibility of compliance performance levels. That is a given. The question is whether that is what the tax function should be focused on and whether that is how your tax team add makes itself invaluable to the business?
Would you like your central tax team to provide strategic leadership to your business? Talk to us about your compliance needs and how outsourcing can transform your team.
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