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Why five years of transforming tax and finance functions is paying off
New tax operating models in the last five years delivered value to businesses, EY survey shows. The next five years will add even more. Read more.
To assess the potential impact of the new rules on the tax and finance function, the 2023 EY Tax and Finance Operations Survey gathered responses from over 1,600 tax and finance executives across 32 jurisdictions and 18 industries, including more than 100 respondents from the Nordics. The survey findings reveal that 89% of Nordic respondents expect a significant to moderate impact from BEPS 2.0, with a large majority of respondents (81%) planning to freeze or reduce the cost of their tax and finance function. Surprisingly, only 25% have completed a BEPS impact assessment so far.
The transformation of tax and finance functions into modern, data-driven operations is motivated by various factors, including the need to comply with tax authorities' increasing demand for real-time data. However, 40% of Nordic respondents identify the lack of a sustainable plan for data and technology as the biggest barrier in this transformation. The survey also highlights talent challenges, with 59% of leaders experiencing difficulties in motivating their teams and avoiding burnout. Additionally, 61% believe that their employees will need to acquire new data, processes and technology skills within the next three years to enhance their tax technical abilities.
What do these responses imply in practical terms? The survey results suggest that cost pressures, increased regulations, complex data and technology requirements, and talent struggles may persist. While Generative AI tools such as ChatGPT offer a lot of transformative potential, for now, 81% of Nordic respondents do not believe that AI tools will enhance effectiveness and efficiency within their tax functions. What is resounding is that all respondents agree on the importance of co-sourcing over the next 24 months, with 91% considering it crucial to increase outsourcing and managed services to reduce fixed costs and manage risk.
Partnering with a provider to co-source multi-country tax compliance and statutory reporting activities offers significant benefits, particularly in driving effective talent management, according to 69% of the respondents.