Technical tax expertise has become more a basic skill from the adviser’s perspective. Data analytics, IT and accounting capabilities as well the soft skills of the adviser are—and will become—the key differentiator. Due to all of the technological developments, this is already part of our present and future. Technical tax advice must be implemented in systems, processes and controls.
Instructions must be given to people who are outside of the tax function. Data has to be analyzed in an efficient and effective manner not only to measure the past but as well to predict the future. Alignment with the business is essential for the tax function to plan in a timely manner and to avoid future firefighting.
In order to challenge and support a client in his mission, an adviser should possess—in addition to excellent technical skills—a clear understanding of communication and collaboration, analytical/critical thinking, project management, change management, information technology, negotiation and leadership. All of these skills are needed in order to be successful.
The indirect tax profession has been an individual sport for a very long time. The profession is still about the individual’s technical tax strength and personal practical experience, and the future generation of advisors are often trained by that individual.
Get the right people in the right roles
It is my opinion that the indirect tax professional of the future will need to take a different approach.
It is simply no longer possible to excel at everything regarding global indirect tax management. Thus, some people can excel in certain areas of indirect tax, and the overall outcome of the team’s effort will make the real difference from a quality standard perspective.
In other words:
Get resources, systems, and skill sets in place to pursue priorities set
The right tax talent and priorities Benchmarking provides objective evidence. It can show whether or not you have achieved your objective set such as a 'mature' tax function' or make visible what needs to be done to make that happen. It might provide the extra arguments to realize change and get buy-in.
Benchmarking yourself against your peers
Gap between current capabilities and future need
Are enough resources available to operate effectively? The indirect tax function is aware of the fact that it is understaffed and that budget is too limited to optimally execute its tasks, but they often don’t know how to change this and get it on the agenda of the CFO. The deployment of expensive fiscal knowledge therefore usually remains limited to control of direct tax.’
The indirect tax department needs to consist of the right number of tax personnel and the right level of skills and capabilities to be successful.
Skills required and buy-in needed According to survey findings the size of the indirect tax team size is often (too) small. Direct tax has not only more staff but are often better positioned. If the Head of Tax and the indirect tax function would figure out how to cooperate more efficiently, they will also bring indirect tax more into the spotlight of the CFO. In order to realize the mission statement in the tittle of this paragraph the following also needs to be assessed to test whether set objectives can be actually realized.
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The skill set is historically focused on technical tax laws
Communicator, strategist and business leader "The modern Tax Director needs to be a communicator, strategist and business leader. He or she needs to engage with their CFO and other stakeholders and feel comfortable connecting with the underlying business to identify risks and opportunities.
How many of the current Heads of Tax have these skills?
It’s a good question, as the Tax Director of old did not always need to develop them. It’s those that are willing to adapt to these new priorities and have the appetite to develop the requisite skills who will remain effective and grow their company’s competitive advantage." by John Dixon (Previously Head of Tax at EY and now Head of Consulting at Pure Search)
Invest in the right skills
Written by Richard Cornelisse
Richard advises multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework.
He started his career as a manager at Arthur Andersen and then became a partner in EY where I led the indirect tax performance team for Netherlands and Belgium. Currently he is a senior managing director of Phenix Consulting.
Richard has over 20 years’ experience advising clients on international VAT issues. He is specialized in the tax aspects of financial transformations, shared service centre migration, and post merger integration work. Richard is also somewhat of a mentor, giving back to the profession. If you are interested in conversation and discussion, please feel free to contact him.