Tax and Finance Priorities for 2019: Six areas of focus for your punch list

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Let’s face it – 2018 had some ups and downs. US tax reform brought excitement, uncertainty, and complexity, causing businesses to rethink where and how they operate. Trade controversy intensified, adding another dimension to global business concerns. And—at the same time—rapidly evolving technologies continued to impact the way people live and work. As we look ahead, how will Tax and Finance tackle these challenges? We’ve identified six main areas that must be on your punch list in 2019.

1

Adapting to US tax reform and policy changes – Be ready for how your business will change.

With much of the guidance on new legislation now available in proposed or final form and with increasing certainty occurring throughout the year, business leaders will want to quickly understand how these rules help (or challenge) structural aspects of the organization. As your organization considers tax planning strategies in light of better guidance, keep in mind that Tax should be aware of and included in all business decisions that can affect the outcome of these strategies (such as changes to supply chain, acquisitions/divestitures, treasury cash positions, and entry into new markets).

Agility is key to managing the complexity of incorporating these new rules. Now, more than ever, you will need to be able to quickly access data and models for decision making and planning for tax reform’s complex and overlapping rules. In 2019, Tax should be the trusted advisor to business leadership that the organization needs.

2

Embracing small automation as an opportunity to lead across Tax and Finance, accelerating your drive towards end-to-end automation.

Small automation does not replace traditional IT-driven technology; however, it fills the many gaps left unaddressed by large-scale technology development. And, it delivers quick wins when used as part of your overall tax technology strategy.

What’s the key to small automation success? Orchestrating multiple technologies, including new and emerging technology, with Tax in control, steering the wheel. In this case, Tax should be leading from the front seat and playing a key role in driving the change needed, including governance and internal controls around financial data and processes. With the headwinds  of complexity now facing Tax functions (including overlap of provisions, increased importance of state taxation, and new significance of controlled foreign corporations), small automation provides data management and automation tools to allow professionals to work faster, more efficiently, and focused on underlying policy and business challenges.

3

Upskilling your workforce is mission critical to attract, develop, and retain employees –  Focus on both tax technical and digital skills is essential.

You need to understand the tax rules and how new technologies can help you succeed. Will tax-technical learning upstage your digital upskilling – or vice versa? Most tax professionals will need to dig deep into the new rules (see our Tax Reform Readiness series) to effectively perform their roles. For digital upskilling, here are three ways to begin to bring new digital competency to life within your organization:

a) Implement “fingers on the keyboard” practical training for All.

b) Include gamification in your digital upskilling approach.

c) Incorporate and lead with digital upskilling as a core element of your talent framework.

 

Based on PwC’s 2018 Digital IQ survey, 60% of organizations seeking to gain efficiencies report that lack of structure to delivering training is an upskilling obstacle.

4

Challenging the traditional Tax function operating structure – Is it a core competency of your organization to have an in-house Tax function?

You should ask yourself this question, at a minimum. Organizations are realizing how difficult it is to attract and retain top talent in this complex regulatory and controversy-prone environment. In some cases, the tax technology landscape no longer supports tax requirements and enhancements to systems are time consuming and cost prohibitive. Therefore, for some Tax functions, it is simply more efficient and cost-effective to move the Tax function to an external service provider. PwC has been leading in this space with our focus on:

  • Access to skilled professionals with ‘in-house’ experience
  • Ability to leverage leading-edge technology and processes
  • An integrated approach to managing the complete tax life-cycle

5

Aligning with Customs and Trade, the ‘new kid on the block’ for many Tax organizations – It’s time for Tax to connect

Without a doubt, uncertainty and risk associated with ongoing global trade controversy and volatility require a strong focus from Tax. Changes in the flow and pricing of goods and services between affected countries could have a major impact on tax strategy. Strategic acquisitions may provide access to alternative global suppliers; however, at the very least, tariffs could add unexpected costs to the supply chain, eroding profitability and disrupting transfer pricing and global effective tax rates.

There are multiple possible scenarios; however, what’s clear is that Tax needs to become more closely tied to Customs/Trade in 2019. Two key considerations around trade and customs for 2019 are:

  • How is Tax aligned with the Customs/Trade function? It’s time to forge collaboration.
  • Trade controversy is becoming the new normal – Avoid flying blindly into tax planning.

 

6

Recognizing that artificial intelligence (AI)—including machine learning—has made a beachhead in Tax and Finance

Many organizations are using emerging technology in their core business operations; however, in the broader Tax and Finance functions, many have not yet considered how these new solutions could be useful or practical. We expect these models to have a direct impact on all functional areas, with some quick wins available in compliance, mergers and acquisitions (M&A)/due diligence, controversy, and document management.

Since the hurdle for professionals is figuring out how these emerging technologies can solve existing challenges, PwC has trained—and continues to train—our people on AI and ML models. And, we are bringing this training to clients, as a component of services, since it’s important to understand the power of these new tools and how they can deliver a good return on investment. Check out the six AI priorities you can’t afford to ignore and click here to find out your digital IQ and learn how to make your aspirations a reality.

Based on PwC’s 2019 AI Predictions survey, 58% of Finance executives will implement continual learning initiatives in 2019 that include AI, so employees can integrate the learnings into the way they work.

As you consider your goals and objectives, use this punch list to make sure you address these six priorities for 2019!

Contact us

Andy Ruggles

US Tax Reporting and Strategy Leader, PwC US

Ken Kuykendall

Services & National Tax Services Leader, PwC US

Tel: +1 (202) 346 5160

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