Component 1 Final

Global Tax Outlook 2020

TOP 5 GLOBAL TAKEAWAYS

THE CHANGING FACE OF TAX

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1) Organisations anticipate continued change in the global tax landscape with a high degree of uncertainty in national and international tax legislation and regulation.

2) Compliance: meeting and managing the cost of increasingly complex and developing tax compliance requirements, and adjusting to tax reforms and new regulations, dominates the tax agenda and increasingly the Board’s time.

3) The tax function is evolving, driven by the changing nature of the compliance function and enabled in part by technology.

4) Total tax liability is an increasingly familiar concept, but not all regions engage with the concept equally and many organisations fail to calculate it effectively.

5) The more mature tax functions are investing in tax technologies to automate the compliance burden, as lower cost alternatives are emerging.

Go to Takeaway #1

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Go to Takeaway #5

Go to Takeaway #3

Go to Takeaway #4

1) Organisations anticipate continued change in the global tax landscape with a high degree of uncertainty in national and international tax legislation and regulation. Views about the effectiveness of tax authorities in combatting tax avoidance and evasion vary significantly.

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3) The tax function is evolving, driven by the changing nature of the compliance function and enabled in part by technology.

BDO are delighted to announce the results of the inaugural 2020 research, conducted between February and May 2020. Set within the immediate crisis, yet with a focus on the underlying regulatory and technological challenges facing tax – the research allows participants a unique opportunity to benchmark their business and the function of tax, against similar businesses, locally and internationally. We take a close look at:

A new international research programme, spanning more than fifty countries, that touches on the most common issues business leaders are grappling with today in Tax.

The most significant tax issues facing the organisation and the priorities that are being set for the tax function; How changes in tax legislation and the behaviour of the tax authorities impact business; Tax strategy, policy and risk – the focus on tax at board level; the primary role of the tax function now and the direction this is expected to take; The use of Technology in Tax – and how this is enabled in practice; and The concept of ‘Total Tax Liability or Total Tax’ – and its value in directing decision making.

believe that tax authorities

20%

have a coherent approach and operate

in a predictable manner.

up with new regulations

68%

of respondents rank ‘keeping up

and legislation’ as one of the

top three priorities facing

their tax function. This was consistent

across all regions. There were

notable differences in the second

most significant priority by region.

say that the tax authorities

in their market have been

relatively effective in combatting

55%

avoidance and evasion.

This varies significantly by region.

rank ‘staying compliant'

given increased demands

to submit more detailed

60%

say this is their number

one tax issue. This was

consistent across all regions.

There were notable differences

32%

tax information’ as their

top three most

significant tax issue

facing the organisation.

in the second most

significant issue by region.

say their Board/Executive

committee are spending

tax compliance and planning.

more time on

40%

of those surveyed say their

organisation has changed

its approach to tax governance

among smaller organisations,

40%

in response to tax authorities.

This finding is significantly higher

among listed businesses and

in the Asia-Pacific region.

Tax leaders aspire to move from

expect tax risk management and

tax governance to be fully

36% to be managing tax risk

proactively, but not fully

integrated with business processes.

embedded in their organisation

43%

As the tax function evolves,

the number of in-house professionals

40% over the next 5 years.

and by an average of

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in two years, and an additional

dedicated to tax and compliance

tasks is expected to increase

This varies significantly by region.

more integrated with the business,

a support function to become

despite the continued dominance

of the compliance agenda.

68% expect the tax function

to be seen as a ‘true business

partner and/or focussed on

adding greater value, with finance

time and resource’ in the

next 2 years (39% today).

4) Total tax liability* is an increasingly familiar concept, but not all regions engage with the concept equally and many organisations fail to calculate it effectively.

of organisations calculate

total tax liability 23% of

organisations calculate total tax

61%

The Americas are most ambitious

about total tax liability,

using automated tools.

74% say in two years

expect the Board to be more

involved with this process going

forward. This varies by region.

55%

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liability using automated tools.

*an understanding of and visibility into the sum of all the taxes a business owes at any point in time

(This is expected to rise to

55% in two years.)

they expect to calculate

it across the business

5) The more mature tax functions are investing in tax technologies to automate the compliance burden as lower cost alternatives are emerging. Tax technology is a key component of managing compliance more effectively and delivering value.

of organisations have a

documented tax

technology strategy

A further 27% have considered

strategy but have not yet done so.

documenting their tax technology

20%

Technology is being used

to varying degrees to

support tax function activity -

direct and indirect tax compliance

are the most common.

have adopted or are

planning on adopting

73%

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This varies by region.

solutions to meet tax authority

digitisation obligations.

about the research

256

The Global Tax outlook was conducted between mid-February and mid-May, with most responses received in the early stages of this period as countries were anticipating but not yet in the full lock down phase of the COVID-19 crisis. While there was clearly caution in the markets at this time, the research themes were designed to focus on the underlying regulatory and technological challenges facing tax and the business of tax, today and 2-5 years ahead.

Explore THE regional OUTLOOK

finance and tax

leaders from over

countries

participated in the research – with a spread across region,

size and type of organisation and industry sector.

Learn more about our participants

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LEARN MORE ABOUT Our participants

Listen to an interview with Robert Aziz, BDO’s Global Head of Tax, on the role that tax has played as a response to the COVID-19 crisis and on the highlights from the research. Read the interview highlights.

On average tax technology spend

is relatively modest and

however there are divergent trends.

expected to remain low,

- New lower cost alternatives

- Tax functions already spending

spend at a faster rate.