Essence of the tax function

The "tax function" is commonly perceived as related solely to operations of tax or accounting department. At the same time, activities of these departments are usually associated with proper tax calculation and payment, including ensuring compliance with the law and, to the extent possible, tax optimisation of, e.g., tax rate in income taxes. In many cases there is the lack of awareness of the wider scope of the tax function, both from the perspective of internal and external activities of an enterprise.

In fact the tax function covers also interactions between different business departments of an enterprise (other than finance and accounting) which, as a consequence of actions they perform, have a final impact (direct or indirect) on taxes. It is also the IT system used, processes within a firm and many others factors.

For whom could the effective tax function be of interest?

Every enterprise may ensure the tax function effectiveness. It is useful, or even necessary, when information and data in a company is spread among many departments and people. In such case making key business and tax decisions is hindered. It requires necessary data gathering, which without adequate procedures and definition of responsibilities often turns out to be time- and work-consuming and is followed by material costs.

Improvement of the tax function management

Tax function, if properly defined and implemented in a company, gradually increases transparency of tax settlements, adds to the value creation in the business activity, optimizes risk management and significantly reduces costs of managing the tax area in an enterprise. However, the above effects can be achieved only through integration of tax function with other business functions.

It should be noted that properly (i.e. efficiently) configured tax function requires a synergy of several elements, e.g.: processes, organizational structure, communication, data management, personnel, technology, leadership, and control and risk management.

There are many elements of the tax function within an enterprise, which when properly improved, may lead to increasing efficiency and reducing the cost of tax management through, e.g., the reduction of time- and workload of processes related to tax management and settlements, volume of data and documents prepared, change and tax risks management, improvement of data quality, effective tax plan preparation and implementation management, etc.

Enodo Advisors services answer to the above and other needs in the area of the tax function effectiveness.