This article is part of a recurring series highlighting recent talent mobility industry reports. If you would like the WERC editorial team to consider covering a specific industry report, email mobility@worldwideerc.org.
KPMG’s Tax Reimagined 2024: Perspectives From the C-suite report has been released at a time of flux that KPMG is calling the tax trifecta. This involves the expiration of 2017 Tax Cuts and Jobs Act (TCJA) provisions next year, ongoing enactment of the Organization for Economic Co-operation and Development’s (OECD) Global Tax Deal, and hosts of regulatory changes globally. The report surveyed 500 C-suite executives in the United States from companies each with an annual revenue of $1 billion or more.
Navigating the Maze
Navigating the trifecta is much like navigating a maze, according to respondents, 95% of whom agreed that the current tax climate is unprecedented. When asked about the biggest disruptors impacting their professions, 44% indicated tax accounting employee recruitment and retention. The same percentage said the adoption and use of generative artificial intelligence (AI) and other emerging technologies was the biggest disruptor. Ongoing tax legislation and regulatory changes came in at No. 3, indicated by 40% of respondents.
Walking a Tightrope
Corporate tax execs are walking a tightrope between two main corporate tax-related events next year. On the one side is the expiration of nearly all individual and numerous business provisions within the TCJA by the end of 2025. On the other side is the continued enactment of Pillar Two of the OECD’s Global Tax Deal, meant to ensure that multinational enterprises pay a minimum 15% effective tax on earned income earned in every jurisdiction they operate in. Some 86% of respondents agreed that compliance with Pillar Two will be costly, while 71% predict major impacts from the expiration of the TCJA provisions.
AI Helps Solve the Puzzle
With Pillar Two foremost on the minds of C-suite executives, 88% believe generative AI will play a vital role in helping navigate the challenges it poses to corporate tax departments; 98% said they will invest in AI capabilities for tax functions within the coming year. Asked what role the technology will play, respondents indicated benefits to workflow automation (46%), tax compliance (42%), and cost optimization (40%). Potential benefits to tax planning and risk management and assessment were also noted.
Data Is King
“Tax departments are uniquely positioned to transform from mere data repositories into powerful engines of organizational insight and decision-making,” the report says. That said, 95% of survey respondents believe that leveraging data effectively will help anticipate future challenges. The survey found a divide, however. When it came to implementation, 60% of executives indicated their tax department leverages data to help drive decision-making all or most of the time, and the remaining 40% said they do so sometimes or rarely.
Tax Professionals to the Rescue
If the phrase “tax trifecta” isn’t enough to keep corporate leaders awake at night, it’s only because they have solid tax departments backing them up, and sometimes leading the charge. “Over the years, tax departments have strived for a greater role in strategic decision-making; and today, their efforts have come to fruition,” the report says. In fact, 90% of C-suite execs say their tax department is vital to improving trust among stakeholders. When it comes to talent mobility leaders looking to navigate this complex space for transferees and related mobility programs, their tax professional counterparts will remain invaluable.