Like companies and accounting firms across the world, corporate tax teams in Europe were suddenly thrust into a remote working environment by the global Covid-19 pandemic.
Now, those European corporate tax functions face a raft of questions made more urgent by the crisis even as they still deal with the challenges they were facing before the pandemic hit.
The pandemic and the accompanying economic uncertainty have brought issues — such as technology implementation, supply chain challenges, and business continuity — to the forefront of many tax managers’ minds. For many European corporate tax teams, however, it’s not just a question of having the right technologies; it’s having to answer more complex questions of how to assess work processes amid remote working, or how to keep confidential data secure with new emphasis on remote teams and collaboration.
To shed further light on these multi-faceted challenges, Thomson Reuters published its 2020 European Corporate Tax Managers Survey, which discusses these issues and myriad others at length. The survey encompasses feedback from 350 corporate tax managers from Austria, Belgium, Germany, Ireland, Luxembourg, the Netherlands, Spain, Switzerland, and the United Kingdom. In addition, Thomson Reuters conducted a series of in-depth interviews in April and May 2020 with 10 senior tax executives from around the globe to better gauge the changes brought by the pandemic.
You can download Thomson Reuters’ 2020 European Corporate Tax Managers Survey here.
While, ironically, the pandemic has bought European tax teams some time by delaying introduction of certain regulations and allowed teams more time to manage the impending changes, other regulatory challenges just as quickly arose. Indeed, even without the current crisis, these tax regulation changes would have been a full plate. Now, however, these issues are adding to the pressure on tax departments to ensure they have clear transparency and visibility over all stages of the tax and accounting function.
If there’s a silver lining here, the survey showed that rather than succumbing to the weight of all these challenges, survey respondents said their tax departments are actively preparing to not just meet compliance targets, but to reconfigure the tax function itself, reviewing processes, departmental structure, and the tax technologies they use.
Similar to their colleagues in the United States and United Kingdom, the survey shows that today’s corporate tax function in Europe is being dragged into the broader challenges of increased efficiency and reduced costs as their parent companies struggle to balance their business in the new Covid-19 world and beyond. The survey also shows that a majority of European tax managers see technology as the best way to improve their operations, of course, but given current conditions, companies and their tax teams may find themselves without robust capital budgets to invest.
Still, European corporate tax departments see themselves on a journey — even amid this maelstrom — to become more tech-savvy, digitized, and data-driven, survey respondents say. And while the challenges that European tax functions face immediately and over the short-term are significant, their success will depend on their ability to harness the power of data as they respond to these challenges, create internal efficiencies, and support the business as a true strategic partner.