‘Corporate tax? Yes, that’s a very simple part of our business’. The chances are slim to none that you will ever come across this statement. The complexities that tax brings along with it, especially within a global organisation, can be somewhat, well, taxing. Regulations are constantly changing and evolving, and it’s of great importance to stay in control of them in order to mitigate the financial and reputational risks that come hand-in-hand with operating on an international scale.
As part of the need to stay ahead of the game, more and more organisations are looking to include tax as part of their financial transformation agenda. Tax transformation can be described as ‘an assessment of the tax function with the objective of creating a more strategic tax department that becomes a more integrated partner within the business ’. This involves evaluating changes in people, process, technology, and data that can lead to benefits not only within the tax function but across the entire enterprise.
One such organisation undergoing a tax transformation initiative is Autoliv, a worldwide leader in automotive safety systems. To put things in to context, Autoliv is a Fortune 500 company that operates in 28 countries and had soaring net sales of $8,842 million in its 2022 financial year. Pierre Jansson is the VP of Tax at Autoliv and is behind the steering wheel on this exciting transformation. He shared his thoughts and advice on this topic with us.
What does it mean to ‘ transform tax’ in today’s world? Is it limited to technology?
I think this differs from company to company based on what the expectations of tax are from both the authorities and the CFO, and it also depends on the environment the company operates in.
Technology is definitely an enabler of tax transformation and acts as a cornerstone for change, but it’s not only about technology. You need to be able to shift the competencies of the department to leverage technology and redefine the governance of the tax function.
Another key element in this transformation is the process. You may need to change your own processes in order to work effectively with new technology. You need to understand the inputs and outputs of the processes you participate in and how you work together with other finance functions and business functions. There are many of these connection points when you start to do this, and you begin to see that you are actually part of a bigger team.