Highlights of the survey
Highlights of the survey
As a seasoned tax leader, you make key decisions every day to evolve your tax department and keep pace with unprecedented pressures, disruptive technological advancements, heightened compliance obligations and more — all while seeking to demonstrate value within your organization and beyond.
For tax executives of multinational organizations, benchmarking against comparable tax departments can be a powerful tool for reflecting on your current position and planning how to prepare your department for the future. To help, KPMG International conducts an ongoing survey of multinational tax departments which charts the evolution of leading tax departments and identifies operational benchmarks for high-performing tax teams. Below are some of the highlights of the survey.
Tax departments today
Among Europe-based companies, most tax functions still fall within the finance function, although a significant proportion are independent. Only 8 percent of heads of tax report to the CEO directly:
The transfer pricing functions of most respondents surveyed are either entirely or generally centralized in the headquarters country. This result is encouraging given the significant challenges arising from new transfer pricing requirements developed under the OECD’s Action Plan on BEPS:
Governance, risk management and tax responsibility
Many companies based in Europe have recognized and responded to the need to demonstrate strong frameworks for tax governance and risk management. Over half of respondents have some form of documented tax strategy. Tax compliance, risk minimization, tax reputation and group tax rate are the most important objectives within the tax strategy’s scope.
Tax departments of the future
The trend toward increasing centralization of tax departments will continue for Europe-based companies, and process standardization tops the list of tax leaders’ priorities for process improvements.
Companies based in Europe may be missing out on opportunities to drive efficiencies by increasing their use of tax-related software. Document management systems are currently the most commonly used tax software. Compliance software, off-the-shelf provision systems and workflow tools are the next most commonly used software:
Tax leaders’ top three priorities for new investment are additional personnel, tax technology and process optimization:
What do the latest results tell us? Compliance and risk management are clearly the top priorities for today’s tax leaders, and the tax department’s contribution to strategic value now seems to take priority over cost minimization in many areas.
Looking ahead, Europe-based companies appear more or less satisfied with their current sourcing models but less satisfied with the ability of their companies’ enterprise resource planning (ERP) systems to provide tax data. Many respondents expect their companies to invest in technology changes and, to a lesser extent, tax software. When asked what investments they’d most like to see, however, investments in additional personnel tops the list, followed by tax technology and process optimization.
Are you interested in taking the survey?
Tax leaders can still participate in the survey. By doing so, you will have the opportunity to receive personalized insights into how your tax department compares across key areas. Please visit kpmg.com/taxbenchmarking or email firstname.lastname@example.org to learn more.
About the survey
- The selected findings in this summary report are based on a survey of 190 leaders in charge of tax policy and operations of companies in all major sectors, with participants from 15 different countries in Europe.
- About two-thirds of respondent organizations are public companies. Over one-third of organizations have more than US$5 billion in annual revenue or turnover. Almost half of respondent organizations have more than 10,000 employees globally. About three-quarters have branches, subsidiaries or other permanent establishments in more than 10 countries.