Global

Details

  • Service: Tax, Global Compliance Management Services
  • Type: Benchmarking study
  • Date: 2/5/2013

With tax transparency and compliance expectations on the rise globally, new KPMG International survey shows that tax directors face a difficult dilemma - how to comply while meeting new demands 

The days are gone when tax was solely an expense to be managed. A company’s reputation is now at stake. Yet a new survey from KPMG International shows that while tax departments around the world are rightly focused on managing the ever increasing compliance burden other important areas of responsibility may be suffering.

The global survey of 1,150 tax executives in 22 countries shows that they are focusing about half of their time on tax return compliance, financial reporting and managing tax audits. Other more forward-looking, higher-value activities — such as optimizing the effective tax rate, cash tax planning, tax process improvement and integration with other internal business groups — are expected to take up only about one-third of the tax department’s time.


Encouragingly, 93 percent of survey respondents (up from 84 percent in 2009) have a tax strategy that aligns to that of the business and 75 percent (strategies) are board-approved (up from 48 percent in 2009). For 73 percent of respondents, the board and/or corporate leadership are directly involved in providing guidance on the tax strategy—a significant increase since 2009 (51 percent).


However, two-thirds of respondents say they are currently involved in controversy with tax authorities; half report that tax authorities are focusing more on tax and accounting processes and controls, tax strategy, risk management and use of technology.


“With approaches to tax management requiring new levels of detail and transparency, companies must review and asses where they put their time, effort and dollars,” says Chris Scott, KPMG’s Global Head of Compliance Management Services. “Given the challenges ahead is the status quo good enough? Good governance includes a tax structure with the right tools and people aligning to the overall business strategy.”


Yet, despite the growing compliance burden and more detailed tax authority focus, additional investment in staff, process improvement and technology to help manage the workload is not a must-have—a surprising 79 percent of respondents feel they have sufficient operating or administrative budgets and only 19 percent say they are looking to change their tax department structure in the near future.


“With tax departments still devoting much of their time to compliance, the challenge lies in how to free up resources and time to focus on a more strategic agenda that proactively supports the wider business strategy and emerging trends,” says Mr. Scott.



About the survey

KPMG International’s global survey of people in charge of tax policy and operations of companies worldwide is one of the largest of its kind. Iterations of the survey have been conducted regularly since 2006, charting the evolution of leading tax departments and identifying operational benchmarks for high-performing tax teams.


In 2012, 1,150 heads of tax in 22 countries (details below) took part in blind telephone surveys to share their opinions on how tax departments are adapting to current business challenges. About 700 of respondent companies are Fortune 500, Forbes 2000 or equivalent. To gain more clarity on the telephone survey results, additional in-depth interviews were conducted with several clients of KPMG member firms and tax professionals worldwide.


The full Global report is now available at www.kpmg.com/goodbetterbest. Check often for detailed country reports that are constantly being added.


Country Base size
Argentina 50
Australia 50
Brazil 50
Canada 50
Chile 50
China 50
France 50
Germany 50
Hong Kong 50
India 50
Italy 50
Japan 50
Mexico 50
Netherlands 50
Russia 50
Singapore 50
South Africa 50
South Korea 50
Spain 50
Switzerland 50
United Kingdom (UK) 50
United States (US) 50

For more information, please contact:

Carolyn Forest

Head of External Communications, Global Tax

KPMG International

+1 416 777 3857

About KPMG International

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

 

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