Survey results are in.
Thomson Reuters surveyed more than 3,500 tax professionals to learn about their corporate tax challenges and technology. Irish McIntyre, vice president of Product Management for the Corporate segment of Thomson Reuters Tax & Accounting business, answers our questions about key findings from the survey and the implications for tax professionals.
Dividends: What are some key themes and findings from the results of the survey?
Irish McIntyre: The two major themes that emerged from the survey results are the challenges of compliance and reporting, and the corresponding data management burden. The findings demonstrate that data management issues grow alongside compliance and reporting complexity and new regulation. Forty-three percent of respondents cited compliance* and reporting as their biggest corporate tax challenge, followed by data management at 27 percent.
The increased reporting requirements from new global regulations require the collection, organization and analysis of massive amounts of data from numerous and varied systems, creating a heavy burden on tax departments.
Dividends: What are the biggest trends driving complexity for tax departments?
McIntyre: The business requirement to comply with new and evolving regulations is the single biggest driver of complexity for tax departments, and also the biggest driver of automation using tax technology. Take a look at some of the biggest regulatory changes over the past year:
Affordable Care Act
The Affordable Care Act (ACA) created significant changes for employers with new requirements for reporting of 2015 healthcare coverage information to the IRS via Forms 1094 and The process required unprecedented coordination and data collection between groups across their organizations.
At an October 2015 meeting with the heads of the G20 in Antalya, Turkey, the Organisation for Economic Co-operation and Development (OECD) finalized its Base Erosion and Profit Shifting (BEPS) Action Plan, aimed at putting an end to corporate tax The BEPS initiative will require multinationals with global revenues of more than €750 million to implement Country-by-Country Reporting (CbCR) for tax years starting on or after Jan. 1, 2016 (start dates could vary) and filing within 12 months of tax year-end.
Financial Reporting Standards
Businesses also faced changes and updates to financial reporting standards. For those groups adopting International Financial Reporting Standards (IFRS), changes are coming for financial instruments and leases, impacting the local GAAP of many countries. Businesses need to ensure financial statements are compliant with changing standards in the countries where they report.
Dividends: Are there other factors driving the need for tax technology?
McIntyre: As if external regulatory reporting obligations weren’t enough of a challenge, internal technology factors also pose a significant hurdle for tax professionals.
For many companies, historical M&A activity and their legacy systems make tax data management a complicated and time-consuming process. Unsurprisingly, 54 percent of tax professionals surveyed tell us that Enterprise Resource Planning (ERP) implementations are underway in their businesses and 28 percent report their biggest challenge around data management is disparate systems and data sources. In addition, 23 percent of respondents report that data volume and inefficiency gathering data is a top challenge and a bigger problem than prior years.
Dividends: What do survey findings indicate about the future of tax departments?
McIntyre: Data management continues to be a major focus area for tax departments. Fifty-five percent of tax professionals surveyed are looking to improve data collection, integration and analysis over the next year.
Tax professionals recognize the need for tax technology to help keep pace with growing demands, and the corresponding need for tax technology experience on their team. Hiring a tax professional with tax technology proficiency will be “extremely important” (rated 4.6 out of 5) in the future, compared to “fairly important” (rated 3 out of 5) just five years ago.
Dividends: Based on the survey findings, what technology capabilities do tax professionals need to meet evolving regulatory demands?
McIntyre: As regulations change both globally and locally, tax professionals need forward-looking technology to keep up with the increasing rate of change. The right tax technology solution must handle every step of the process – collecting, processing, filing and reporting at the speed of business, from disparate sources and across global entities – so tax professionals can spend more time analyzing and interpreting data to make informed business decisions.
* Survey methodology: A total of 3,593 respondents completed the online survey between Oct. 29 and Nov. 5, 2015.
About the interviewee
Irish McIntyre, vice president of Product Management for ONESOURCE solutions, leads a team of product managers responsible for the strategic product direction within the Corporate segment of Thomson Reuters Tax & Accounting. He has served in Product Management leadership roles at Liquid Engines, Procinct Security, Kana Communications and netDialog, and held multiple roles at Lotus/IBM. McIntyre presents regularly at conferences and has over 20 years of leadership and software development experience.