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Tax leaders

Latest findings from PwC’s Pulse Survey

Planning improvements for the tax function

Our latest PwC US Pulse Survey shows that tax leaders have an opportunity in front of them: to make strategic business changes that would align more closely with the finance function. Just under half (47%) of tax leaders say they’re planning to make changes to their processes, compared to 58% of CFOs who say the same. 

While many companies may have already made improvements to their tax function ahead of the end of the calendar year, those that aren’t planning on doing so could be missing the bigger picture. Tax leaders who plan to maintain the status quo going into the next year and ignore opportunities to bring extensive transformation to tax may also lose their chance to build a more resilient tax function during a crucial time.

All the movement from the last year can potentially act as a great catalyst for change — prompting organizations to reassess processes, reconsider team alignments and allow for a more streamlined tax function overall. If they haven’t already, tax leaders should take this opportunity to align with the overall goals of the finance function and adapt to become fit for purpose.

Tax leaders have an opportunity: To align more closely with finance


CFO
Tax Leader

Changes to our processes (automation, documentation) to make us less dependent on employee institutional knowledge
%
%
Changes to our strategic planning based on changing business conditions (inflation, consumer confidence, government policy)
%
%

Q: As you look to the next 12-18 months, which of the following strategic business changes are you making based on your company's experience around work during the pandemic? (Select all that apply.)
Source: PwC US Pulse Survey, August 19, 2021: Tax buyer base of 105, CFO base of 128

Growing imperative for cross-functional collaboration with tax around remote work

Nontraditional types of mobility that do not require a formal relocation to another city or country were already exponentially growing before the global pandemic. The most common workforce location policy moving forward will likely be a mixed model with some roles being performed in person and on-site full time, some hybrid and some fully remote. Seventy-five percent of tax respondents said they’re accounting for the implications of employees who are working remotely across state or country borders in some way. Most are considering employment tax matters when creating rules around who can work remotely across borders (based on role, entity presence and the employee’s legal right to work) and potential salary adjustments for fully remote employees. 

Many tax questions arise when employees work elsewhere — so how are leading companies dealing with this from a compliance perspective? By working together and acknowledging it’s one organization dealing with the compliance risk of remote work. It’s important to consider one message and team within the organization to support the remote working process in a secure and compliant way.

Companies need to have a broader strategic view, and there isn’t one group that can do it all. Cross-collaboration with tax is more critical than ever so that organizations avoid the risk of unanticipated tax assessments while resources are often stretched thin with other work.

HR, mobility, legal, corporate tax and payroll, among other functional areas, will likely need to break down the silos and come together to create an effective policy to manage risk as they support a hybrid strategy. Rather than feedback on the back end, organizations can allow tax to come into the conversation early on to avoid unanticipated but likely tax assessments.

Accounting for the tax implications of remote workers


Consider corporate tax nexus and/or employment tax matters when creating rules around who can work remotely across borders
%
Consider tax implications for business travelers
%
Adjust for tax withholding for the remote work period
%
Consider alternate employment vehicles (such as global employment companies) for cross-border remote workers
%
Provide tax compliance services support for the remote work period
%
Make salary adjustments for the remote work period
%
Not applicable
%
Other (please specify)
%

Q: How does your organization account for employees who are working remotely? (Select all that apply.)
Source: PwC US Pulse Survey, August 19, 2021: Tax buyer base of 105

Tax departments are leaning into digital transformation

The importance of digitization continues to be a priority for business, and tax functions are pressed to gather information and gain insights more efficiently than before. It’s likely because of this that 84% of tax respondents have a concrete approach in place for how they’ll digitize their tax function. While cloud may cover a broad range of topic areas, over a quarter of tax respondents say they plan on increasing their investment in cloud and automation as the main approach for digitizing the tax function. 

But while many tax leaders make plans to adopt digital solutions, they may not find the time to implement them, despite the highly manual nature of tax-related processes. According to the results and due to the tight staffing models faced by many tax functions, tax respondents are less likely to lean on tax employees. They’re focusing instead on enhancing processes, increasing investment in technology, leveraging IT teams within the organization and outsourcing where needed. 

While the motivation behind this focus may be to quickly scale digitization, there’s a missed opportunity for quick wins that accelerate the digital journey and show instant ROI. Whether encouraging and incentivizing employees to develop automations or leveraging trusted pre-built automations, tax leaders can get a head start on their digital journey and easily show the impact to the business, saving weeks if not months of time.

Tax leaders are taking steps to adopt digital solutions


Increase investment in cloud and automation
%
Redesign processes
%
Leverage internal enterprise IT teams
%
Incentivize upskilling for current employees
%
Outsource to third-party consultants
%
Recruit/hire based on robust data and automation skills
%
Not applicable
%
Other (please specify)
%

Q: In the next year, what is your organization's main approach for digitizing the tax function? (Select one.)
Source: PwC US Pulse Survey, August 19, 2021: Tax buyer base of 105

About the survey

Our latest PwC US Pulse Survey, fielded August 2 to August 6, 2021, surveyed 105 tax leaders from Fortune 1000 and private companies, along with other C-suite executives, about business priorities and decisions they’re making around the future of work. Find all of these insights in our PwC US Pulse Survey.

Contact us

Ken Kuykendall

Ken Kuykendall

US Tax Leader & Tax Consulting Platform Leader, PwC US

Dom Megna

Dom Megna

US Tax Reporting and Strategy Leader, PwC US

Eileen Mullaney

Eileen Mullaney

Principal, Leader, PwC US

Rob  Burke

Rob Burke

Partner, PwC US

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