42022660_Global Tax Outlook 2023

“The Tax landscape is forcing leaders to evolve their thinking on how to meet both short-term demands and long-term strategic priorities. It means building a Tax function on sustainable foundations, but one which is agile enough to meet new demands at very short notice. Our report delves into these issues and sets out our key responses to help Tax leaders face them, now and as we look to the future.”

Robert Aziz

Global Head of Tax

Welcome to the 2023 edition of BDO’s Global Tax Outlook.

The global economy is emerging from the shadow of the COVID-19 pandemic, but it is facing new challenges from the war in Ukraine, an energy price shock, inflation, and persistent challenges for supply chain security.

At the same time, the world faces new tests associated with addressing climate change, an aging population, increased migration, and digitalisation. Tax has an ever increasingly important role to play in how the globe, region, and each country, confronts the turbulence in the global economy over the coming years. We conducted our research for Global Tax Outlook 2023 through the late Spring and early Summer of 2023. Produced in conjunction with research organisation Meridian West and drawing on the expertise and insights of BDO experts around the globe, Global Tax Outlook 2023 reveals some clear trends, threats, and opportunities, that are emerging in the tax-world. As 2023 draws to close, the purpose of this report is to highlight our key findings and to draw some conclusions on the outlook for tax.

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The Five Challenges

Our research shows that the modern tax function faces Five Challenges that dominate the tax agenda.

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Risk

Businesses are encountering an increasingly complex tax landscape. The legislative tax landscape is increasingly complex, and there are heightened levels of scrutiny from all types of stakeholders. Tax leaders must proactively manage tax policies, procedures, and governance in a way that ensures compliance in an increasingly transparent world.

Successfully navigating the interconnected Five Challenges of Risk, Cost, Efficiency, Talent, and Disputes will be paramount for tax function leaders in the years ahead. By confronting these challenges proactively and employing effective long-term strategies, tax leaders will be able to sustainably contribute to their organisation’s future success, while still meeting their compliance obligations.

By combining these responses, tax functions can optimise their effectiveness, improve compliance, manage risk, reduce costs, and focus on contributing to the organisation’s long-term commercial strategy. Download Global Tax Outlook 2023 to read the top Three Responses Tax Leaders told us they were adopting to work smarter within the constraints of its available resources.

Modern tax functions are embracing Three Reponses to tackle these challenges.

Three Responses

The intersection between tax and sustainability is becoming increasingly important. The emergence of a more strategically focused, influential, tax function, in alignment with the commercial strategic direction of the organisation, will need to be reinforced with clear, effective, strategies around sustainability in tax matters. Our report analyses how sustainability is already being adopted as a key performance metric within the tax function. The connection is expected to strengthen significantly in the next few years.

Organisations that can successfully align their tax strategies, sustainability goals, and commercial plans, stand to gain considerably.

The Sustainable Tax Function

“More than half of tax departments have a formal mandate to advance their organisation’s ESG strategy. This should be viewed as an opportunity rather than a burden. Tax leaders should be ready, and involved in developing sustainability and ESG strategies.” Karen Baum Managing Principal, Sustainability & ESG BDO USA

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Industry sectors

Tax experts

Countries

Senior decision-makers

630

Report highlights:

It brings together views from across Europe, the Middle East and Africa, as well from Asia, the Pacific regions, and other parts of the American continents. The report reflects the views of more than 630 senior decision-makers, representing 48 different countries. To maintain balance, and ensure accuracy, we obtained the views of at least 30 respondents in each of the major economies included in the survey. All respondents were tax experts, whether on compliance and reporting, or on planning, structuring, and advisory matter. The report reflects the views from 11 different industry sectors, from asset management to retail and consumer products, and from professional services to manufacturing. All types and sizes of business are represented. Use the opportunity to discuss the findings and how they relate to your business with a member of the local BDO team.

Global Tax Outlook 2023 aligns with BDO USA’s BDO Tax Strategist Survey.

About our research

Efficiency

Cost

Disputes

Talent

Against the backdrop of increased workload, budgetary pressure, rising tax liabilities, and greater scrutiny, the tax function is having to enhance the efficiency of its performance. Tax departments must optimise limited resources and implement new and creative processes to manage these increased responsibilities.

In a world of growing geoeconomic tensions, tax complexity and risk, tax disputes are becoming ever more prevalent. The strategic tax function need to develop effective policies to mitigate the risk of tax disputes arising.

Organisations are experiencing increased total tax liability, with the upward trend set to continue. Pressure on tax leaders to optimise tax planning and minimise liabilities are likely to rise.

As the tax function assumes a more strategic role, tax leaders identify a shortage of candidates with the necessary skills to meet the evolving needs of the tax function. Tax leaders are facing challenges in finding, and retaining, professionals with the necessary skills to understand and adapt to new tax regulations, implement, rapidly evolving technologies, and embrace the strategic oversight demanded by the organisation.

Risk

Cost

Efficiency

Talent

Disputes