Assume that a Tax Function of a company works under the same market principles as tax advisers and that the inhouse clients are the executive, finance, procurement, IT, logistics, internal audit, HR, legal etc.
What do you consider the requirements for customer satisfaction?
Jack Welch is a role model for many. His mission statement was “boundarylessness”: “break down barriers and improve teamwork up, down, and across organizational lines. In his view a considerable amount of money is lost due to disconnects or competition between groups that should be working for a common cause: providing value to customers.”
Is everybody’s added value in a certain business process known and communicated?
If not is that something that should be managed top down, bottom up or both? If the company’s culture has to change the only way is a top down approach. That means that the executive has to be actively involved in order to optimize the success rate.
That is exactly the reason why improvement or remediation of a company’s tax control framework does not work without a good flavor of Jack’s “boundarylessness”.
To define the performance requirements for indirect tax the following could be used as a guideline:
- Tax Planning: identify, recommend and successfully implement indirect tax projects that assist in achieving the objectives of the indirect tax department part of the business objectives
- Tax Accounting: proactively anticipate on changes in the business and outside the business and successfully communicate these changes to the concerning departments. Furthermore look after a correct implementation of these changes
- Tax Compliance: look after a correct, complete and timely Indirect Tax reporting of all entities. This includes that additional reporting relating to these Indirect Tax returns is taken into account
- Tax Governance: all corporate departments are well informed and/or have the availability of a VAT work instruction so it is clear when to consult the indirect tax department
- Support Other Departments: activities of departments that are being affected by VAT risks have been successfully identified and these departments have been well instructed to reduce these risks.
- Audit Defense: roles and responsibilities have been determined who deals with the tax authorities during an audit (announcement) and tax authorities questions and procedures “how to act” (e.g. never provide documents without first making copies) have been documented and rolled out.
By Richard Cornelisse, CEO of the KEY Group
Setting The Objectives Of The Tax Function
Lets assume that the business objectives is to realize cost efficiencies or increase market share via takeover(s). From a tax perspective the difference between future firefighting or being in control has to do with being involved and the timing of that involvement. A tight connection to the business units and their decision making process is essential. Some soft skills are necessary to make that happen.
Tax Function Objectives:
- Contribute value to achieve the companies business objectives
- Manage ongoing risks and opportunities
- Ensure compliance with tax laws and reporting