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Arriving now: The tax executive’s 2024 agenda
What’s important to tax executives in 2024
Five topics shaping the tax agenda
Pillar Two is dominating the headlines, but there are other macroeconomic pressures — possible recession, global inflation, rising interest rates and geopolitical challenges — that put tax at the forefront of business decisions.
You’re also facing regulatory uncertainty, the tax implications of sustainability measures, the competition for talent and digital transformation. As a tax executive, you’re uniquely positioned to help drive trust and strategic business outcomes — from new business ventures to supply chain to digital transformation — across the enterprise.
Tax bills not the only thing at stake as new risks loom
As tax leaders consider the upcoming election, 56% rank a potential higher US corporate tax rate as a top-3 tax-related issue that would affect their company. And they’re weighing what they’d do to offset the effects, according to our October Pulse Survey. More than half would consider either cutting labor costs or relocating revenue-generating activities outside the US, or doing both. But the US corporate rate is just one of their concerns. They’re also worried about international tax changes scheduled to take effect in 2026. All of these issues highlight the expanding remit of tax leaders.
Explore how tax leaders are preparing for potential policy changes in the latest PwC Pulse Survey
Collaborate on Pillar Two now
Pillar Two is an unparalleled shift in how companies have been taxed on international operations for decades, and there’s little time before the new rules take effect on January 1, 2024. Don’t underestimate the additional pressures it may place on your team — and the opportunity it presents to help modernize operations and drive value.
If your company is part of a multinational group with annual consolidated revenues exceeding €750 million, you may need new tax calculations in every jurisdiction where you operate. Connect now with colleagues beyond tax, including financial reporting controllers, IT, human resources and other corporate stakeholders. They own data that lives outside your systems, including enterprise resource planning, financial consolidation and employee benefits — information you'll need for your calculations.
Looking ahead
A holistic data and technology strategy is essential to navigating Pillar Two alongside your other compliance obligations. Now is the time to build your data models and to choose a calculation engine to help you determine global and local tax obligations. A multifunctional team can help you create an implementation plan based on operational readiness, data strategy and quantitative analysis. Automation can streamline your ability to extract, cleanse and organize the data.
64%
of tax leaders say they are focusing on requisite data feeds and systems to handle all aspects of Pillar Two
Source: PwC Pulse Survey, August 2023
Transform tax with tech and talent
Skilled tax talent is getting tougher to find, as the number of CPAs declines. Tax technical professionals can be working through repetitive tasks, such as combing through spreadsheets to meet reporting requirements. Digital transformation, combined with new talent sources, could free tax technical professionals for activities that can drive greater value.
Consider hires with non-traditional experience, such as data specialists and project managers, who can help aggregate data for increased compliance and efficiency. Data automation tools can coalesce real-time data from enterprise-wide platforms to inform better decision-making. And managed services, outsourcing, or co-sourcing models may help you reduce costs by providing access to investments that third parties are making in technology, so you don’t have to. When used responsibly, emerging technologies like generative AI can help deliver efficiencies that support your human-led workforce.
Only18%
of tax leaders strongly agree that their companies successfully attract and retain the talent they need
Source: PwC Pulse Survey, August 2023
Looking ahead
Generative AI, automation and cloud transformation can help integrate and enhance almost all aspects of business operations — from customer service to finance, legal and human resources. Align with your CIO on your enterprise technology transformation strategy. Be intentional about use cases and prioritize a responsible and trusted approach to manage risks and encourage responsible innovation.
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Enhance compliance to build trust
The public’s expectations of business continue to expand, and transparent reporting around tax strategies and compliance can support your company's efforts to earn stakeholder trust. The European Union’s enactment of public country-by-country reporting and the Financial Accounting Standards Board’s proposed amendments to income tax disclosures — expected before year’s end — are just two examples.
Compliance can also help unlock greater visibility into where the business needs help, which can further bolster stakeholder confidence. To get there, make sure your underlying core tax reporting and planning processes are fit for purpose. Understand your data needs to meet the growing compliance and reporting obligations. Sensitize ERP systems during cloud upgrades to help deliver tax-ready data, and consider centralized data platforms for critical analytical capabilities.
Looking ahead
Digital transformation is essential to building trust and moving the tax department forward. A tax function that’s data-powered and tech-enabled can anticipate change, enhance deliverables and respond quickly to requests from taxing authorities. Operational readiness is a critical way to build trust with stakeholders. Cultivate efficiencies that will not only help reduce costs, but can also enhance accuracy and can scale as needs and resources change.
91%
of business executives say their ability to build and maintain trust improves the bottom line
Source: PwC’s 2023 Trust Survey
Get ahead of regulatory uncertainty
Global tax policy will continue to increase risks of higher tax costs and administrative challenges for multinationals. And while you may expect few changes to US tax policy, reality may be different after the 2024 presidential election, with key provisions of the 2017 Tax Cuts and Jobs Act set to expire in 2025. At the same time, guidance surrounding the credits and incentives within the Inflation Reduction Act (IRA) is evolving.
Globally, Pillar One, which would change where sales to customers in other jurisdictions are taxed, is in limbo. There’s also much to learn about the Carbon Border Adjustment Mechanism, a pillar of the European Green Deal, which aims to establish a competitive playing field by compensating for differences in carbon prices between domestic and imported products.
68%
of C-suite leaders say they are engaging with policy makers or monitoring global and US tax policy
Source: PwC Pulse Survey, August 2023
Looking ahead
As you prepare for domestic and international changes, coordinate across the C-suite to increase the return on investments eligible under the IRA. Partisanship in the US may limit the near-term scope of new tax and spending legislation. But as election season ramps up, so will questions about the effects on tax policy. You’ll need to stay ahead of the prospective changes in domestic and international tax policy issues and remain engaged with policymakers to communicate the prospective impacts of their decisions on economic growth.
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Position tax as a business partner
As the C-suite recognizes how early strategic planning with tax can support growth initiatives, tax is becoming a driver for sustainable enterprise growth. For example, working with the CIO, you can help bolster return on digital spending by identifying research and development credits that could lower the cost for qualifying expenses. And as your COO tackles supply chain bottlenecks, you can help avoid unexpected tax costs.
One way to bring value is by identifying funds for transformation. Energy-related credits and incentives within the IRA can improve cash flow and fund broader initiatives, and direct payments and transferability of tax credits can provide alternative financing structures for investments.
Looking ahead
Lean into technology, including generative AI to help strengthen your strategy and support innovation, responsibly. By providing valuable, real-time insights to the business, you can help shape investment decisions, identify the potential impacts of mergers, acquisitions or expansions into other territories or digital transformation strategies.
74%
of tax leaders say their function is most aligned with treasury management
Source: PwC Pulse Survey, August 2023
