1. Tax Transformation: What does it mean to you?
Transform to Perform
Tax Transformation: What does it mean to you?
Nathan Andrews, Partner
Carl Mallios, Partner
Allison Matthews, Senior Manager
Deloitte Tax LLP
May 1, 2015

2. Trends in tax transformation

3. Trends in tax transformation
Why tax? Why now?
Accelerating globalization
Growing business complexity and regulation
Evolution of tax applications
Tax considerations can be pivotal in strategic business decisions
Tax risks are growing due to changing tax laws in multiple jurisdictions
Commercial tax applications have come of age, enabling wholesale process change
Evolution of the finance function
Intensifying competition
Increasing need for diverse talent
CFOs expect tax executives to do more with less
New competitors, markets, and business models are driving need to grow top line
Tax departments require personnel with advanced technology and business skills

4. Trends in tax transformation
Focused vs. integrated transformation
Global Tax Strategy Development and Execution
Tax Accounting
C-Suite Communications
In-Country Taxation
Finance/ Capital Structures (Treasury Support)
Indirect Tax
Risk and Controversy Management
Regulatory Compliance
Customs
Tax Resource Management
Transfer Pricing

5. Emerging expectations

6. Tax departments tend to be the largest consumers of financial data
The way forward
How can tax create value?
Gain efficiencies
Manage risk
Boost EPS
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

7. What is the transformation?
Expanding the role of the tax function
Traditional role
Enhancing the tax function for greater impact
Planning
The company’s tax & finance profile
Process, technology, and data management
People
Sustainability
and efficiency
Emerging additional expectations
Reporting
Strategic partnering across the organization
Managing
Collaboration
Clear communication
Leading strategic initiatives
Derived from Deloitte stakeholder interviews, including over 70 CFOs, in preparation for Deloitte Tax Executive Transition Labs™.

8. Expanding the role of the tax function
Enhancing the tax function for greater impact
Process, technology, and data
Sustainability and efficiency
Establish global tax processes
Integrate technology across business functions
Access data for increased efficiency and effectiveness
Maintain quality of data used by Tax
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
Tax function
People
Meet heightened expectation of sustainability and efficiency in traditional roles
Determine appropriate sourcing mix: in-house, outsource, offshore, shared service center
Implement succession planning

9. Expanding the role of the tax function
Strategic business partnering across the organization
Collaboration
Clear Communication
Leading Strategic Initiatives
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

10. The way forward

11. Transformation enablers
Critical enablers to successful transformation
Data and technology
People and organization
Risk framework
Business partnering
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 professionals of 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
Communication of risks

12. Opportunities to transform vs. react
Operational Transfer Pricing
Business Model Optimization
Integrated Tax Systems
Tax Data Management
Organizational Design Sourcing
Tax Technology Architecture

13. Taking action to transform2
Understand perspectives and expectations 1
Define your vision
Focus: Gain insight into perspectives from external stakeholders and your direct reports to calibrate expectations and understand opportunities for transformation and alignment
Focus: A shared vision of key characteristics that define your department in 3-5 years. 3
Assess your effectiveness
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.
Transform 4
Prioritize opportunities 6
Confirm your commitment
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.
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. 5
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.

14. Building a business case
Alignment and scope
Value discovery
Analysis
Validation
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
Review, validate, and finalize business case with stakeholders
Present findings to finance executives and project sponsors

15. Questions and answers

16. 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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