LONDON (20 October 2022) – Ryan, a leading global tax services and software provider, today announced the results of its recent European market insights survey. Facing the rampant and unrelenting speed of change in the continually evolving European landscape, organisations have the option to passively attempt to keep pace, hampered by time, process, and resource restrictions or, instead, be intentional in their efforts to leapfrog the challenges by embracing change to building a tax centre of excellence. Those that invest in the latter stand an infinitely better chance of transforming their tax functions into a best-practice operations aligned to deliver on the company’s key priorities.
Trends from previously undertaken surveys have not only been confirmed yet again, but in some instances have also amplified, according to the latest results. The challenge of alignment between finance and tax executives remains an unaddressed chasm, threatening to undermine business growth and organisational effectiveness. Furthermore, the issue of communication between tax and finance teams reveals an even more startling perception gap, with 26% of senior finance executives believing tax executives are ineffective at communicating with the finance function, while only 1% of tax executives sharing this view.
A new insight that has emerged is that digitisation is a double-edged sword. While it holds the theoretical promise of automation, the sheer cost, scale, and scope of undertaking tax technology transformation internally seems daunting. Because of its cross-functional nature intersecting tax, finance, operations, and IT boundaries, the aforementioned lack of alignment contributes to the inability for organisations to effectively undertake significant and impactful technology investment, with 68% of tax and 37% of finance executives believing that outmoded technology causing errors will impact the effectiveness of their tax functions in the next three years.
While there is agreement on the impact of changing tax rates and new tax laws on their organisations, the consideration that tax itself should be part of a company’s strategic planning process remains a vast area of dissonance. Nearly 80% of tax executives believe that transactional tax data holds key strategic importance for an organisation; however, only 14% of finance executives agree.
Building a Case for Change
“The survey supports the feedback we hear daily from our clients,” said Ryan President of European and Asia-Pacific Operations Jon C. Sweet. “Tax leaders have a vision of their department’s potential as a profit centre and as the spearhead of their organisation’s efforts to become data-first at every operational level. The results of this new survey also remind us to continually seek creative ways for our clients and to present a path forward for them to address the changing European tax landscape, with digital tax transformation playing an important role.”
“The perception gap between senior finance and tax executives will only continue to grow if it is not addressed head-on,” says Scott Fowler, Principal, Client Services at Ryan. “By investing in transformation initiatives, organisations can harness the full power of their financial and transactional data and transform the tax function from a reactive cost centre into a strategic business partner with a focus on the bottom line.”
A white paper on the survey, titled “Building a Case for Change: How to Amplify the Strategic Value of Your Tax Function” analyses the findings, revealing a roadmap to align tax and finance leaders’ efforts to build strategic tax functions to become a profit-focused component of the business. Read the complete white paper here.
Other key findings of the study include:
- Three-quarters of tax professionals are concerned about the impact of changing tax rates or the introduction of new taxes on their organisation’s ability to effectively manage tax changes
- Changing business structures was also a key concern for nearly half of tax professionals (49%), compared to 36% of finance executives
- Almost a quarter (24%) of finance executives said that their tax function was not effective at managing costs, compared to just 1.4% of tax executives
- Among respondents who fully outsource indirect tax, 40% said their ability to optimise tax recovery was “very effective,” compared to just 14% among respondents from organisations where indirect tax is not outsourced
Ryan, an award-winning global tax services and software provider, is the largest Firm in the world dedicated exclusively to business taxes. The Firm provides an integrated suite of international tax services on a multijurisdictional basis, including cost management, compliance, consulting, and technology services. Ryan is a 10-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognised as the most innovative in the tax services industry, Ryan’s multidisciplinary team of more than 3,600 professionals and associates serves over 20,000 clients in more than 60 countries, including many of the world’s most prominent Global 5000 companies. More information about Ryan can be found at ryan.com/europe. “Ryan” and “Firm” refer to the global organisational network and may refer to one or more of the member firms of Ryan International, each of which is a separate legal entity.
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