How can embracing disruption create clarity?

The business world and the world at large are merging – they already have in many regards – with greater alignment happening every day. When sustainability is integral to business strategy, the world works better – for business, people and the planet.

But that demands evolving out of outdated business models. In a word, innovation. And sustainability is the innovation opportunity of our lifetime.

Enterprises must collaborate, innovate and accelerate to move into a more sustainable future. Doing so will help bring about greater financial, individual and societal long-term value for all stakeholders.

The sustainability and ESG challenges that organizations face, however, are daunting, but not insurmountable:

• The status quo is in the throes of disruptive global trade developments, the pandemic and other geopolitical events, which have disrupted business as usual for businesses and governments alike.
• Acknowledging and reducing global footprints means amending global operations, which carries significant near-term cost.
• Maintaining revenue and attracting investments have increased in importance for government agencies.

In a tax and regulatory environment requiring additional transparency and governance, organizations need to take urgent action. Tax can be a catalyst, playing a critical role in accelerating sustainability strategy and building long-term value.

Tax credits present a unique opportunity while posing a unique challenge. Generated by employment changes, research and development, capital investments and workforce training, and more, tax credits are available at all levels of government. But you must identify the right ones for your business in terms of value that they offer.

Once identified, businesses must then pursue, and even negotiate, with the appropriate country, and federal, state and local agencies. Further, businesses have to ensure compliance, plus prepare relevant tax opinions and audit support documentation or risk losing out on tax credits and incentives.

Local, state, global tax policies – all under pressure.

Multinationals are navigating a complex and rapidly changing global tax landscape. Tax reform proposals are being debated in many jurisdictions, including the US.

While tax policy is constantly in flux, tax enforcement is constantly evolving – all the more reason that businesses need clarity when it comes to tax policy developments. With such a perspective – and a centralized tax strategy aligned with the broader business – organizations can manage risk, enhance decision-making and promote cost efficiencies.

Markets, businesses and customers alike bear the brunt of changes in tax policy and tax administration, which are brought about by economic and political pressures. Increasingly interconnected, tax changes in one jurisdiction can easily trigger changes globally.

This is leading to increased collaboration among countries, necessitating the collection and sharing of taxpayer information. Gone are the days of tax controversy as two-sided, country-specific disputes. Now, the melee has evolved into a multidimensional, multicountry dynamic.

Accordingly, tax and business planning requires companies to act so that their people, policies and systems keep pace with this interconnected environment. This demands understanding tax policy trends and anticipating future developments.