Former IBM CEO Sam Palmisano puts several interesting questions to business leaders in his new e-book, “Re-Think: A Path to the Future.” Similar questions also face leaders of tax functions. Here’s one passage that got me thinking:
Today, global economic integration presents enormous opportunity for the future of business and society. And while many point to the risks of this integration, the more pressing and more pragmatic questions to me are the following: How do we deal with the future? Do we embrace it? Or do we cling to the past?
Palmisano knows a thing or two about what it takes to prepare a business for a more global future. Palmisano served as chairman, president and chief executive officer of IBM, where he worked for 39 years of his career.
In his book, Palmisano expresses pride for leading IBM’s transition from a mere “multinational company” to what he describes as a “globally integrated enterprise (GIE).” The “fundamental question for companies – particularly those in developed markets – is not whether to compete globally,” Palmisano writes, “but how to compete globally.”
Palmisano’s thinking generates highly practical questions we ought to be asking right now. One question I asked while reading the book was, “What about tax?” There are three mentions of the word “tax” in the book. Tax is our purview, and the book’s strong argument ought to stimulate tax professionals to ask insightful questions of our own regarding what it takes to create a “GIT” – globally integrated tax function.
For example, in recent months we’ve been working hard to understand the global, regional, and local dynamics of today’s corporate tax departments, whether they are headquartered in Frankfurt, Shanghai, or Chicago and operating in Sao Paulo, Singapore or Johannesburg.
What we’ve found is that it’s important to place the appropriate tax subject matter expertise in the right locations, empowering those team members with the information they need to create strategy, comply with reporting regulations, or negotiate with local tax authorities – while accounting for challenges of language, currency, and culture. This is just one of the ways that tax is dealing with global expansion issues.
Vertex is committed to delivering the data management capabilities to support the globally integrated tax department, and Palmisano has given me a new level of respect for the organizational challenges faced by global tax executives as they think – and rethink – about the best ways to provide strategic support to their GIEs.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.