The role of the Tax function in operations has become broader and more complex. The question asked by many corporate managers is – What does a successful Tax function involve and how can its success be measured?
PwC’s report, ”Defining Success – What KPI’s are driving the tax function today?”, is the tenth report in PwC’s report series – Tax Function of the Future. This report series examines the future of Tax functions and methods for changing today’s Tax functions so that they comprise a strategic asset in a company’s future business operations.
This report presents the key factors that are decisive for a successful Tax function. The report also describes the indicators which can be used to evaluate how well a Tax function is performing in today’s environment. It also provides examples of indicators which are particularly relevant within various tax areas. Finally, the report explains how these aspects can be implemented into a company’s operations.
There are four key factors and certain indicators which are decisive for a successful Tax function.
- This is about the manner in which the company’s tax costs are handled in terms of the effective tax rate and actual tax costs.
- That the function is managed so as to counteract tax risks related to the company’s financing and reputation.
- If the function is effective when it comes to the use of technical resources, organizational strategies and the competence of the personnel within the company.
- Furthermore, the indicators should be used in a sustainable manner by being regularly evaluated and adjusted to achieve long-term success.
In order to achieve success, we recommend establishing a tax strategy focusing on indicators which is clearly defined, measurable and in accordance with the company’s business strategy. In addition, it is important that the company adjusts the strategy with regard to any changes in its operations.
Should you wish to discuss your tax strategy, please feel free to contact us.
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