There has been a lot of discussion on Tax Reform both in the US and globally. However, a common question we receive is this - do I need to change how my global tax function is designed based on the new US laws? Our point of view is that tax reform by itself does not require you to change; however, it is one more disruptor that combined with other factors (such as technology, desire to drive costs lower or increase value, or life events of an organization) that can cause you to re-evaluate how you are organized. Let us explain.
What factors should be considered when leaders select the ideal tax operating model for their organization? On our recent Tax Function of the Future webcast, Tax Organizational Design - Options to Manage Global Tax Team in a Post-reform World, we covered the common tax organizational models we see employed and evolving catalysts for change. Let’s review.
Not all tax functions will benefit from the same organizational design and the catalysts for change vary by organization. As such, there are many design elements to consider when designing an effective tax operating model.
The first step is to understand what defines success within your tax function and organization. Start by reviewing the following key success factors for tax:
These success factors, among others, can be used to measure performance and set the stage for the specific elements that shape the function’s design.