Tax Manager and Local Finance Collaboration

It is very often our job to keep local finance on the rails 🛹. And I mean this in the most positive and collegial way possible. Here is why:

– Tax and finance need each other. Tax delegates quite some tax jobs to (local) finance. And that makes sense. Don’t forget, tax is and will be a team sport;
But we should remember that (local) finance does not have a tax background. So we ask them to do tax-technical work, whereas they don’t necessarily have the expertise we have. And we are demanding. Very demanding;

– Obviously, local finance is closest to the local regulations. They know the forms. They know the deadlines. They understand best the local filing and payment modalities across the different tax domains. They are closest to the advisors. But they need our handholding;

– Typically, tax sets out the policies and the processes, in which (local) finance is one of the key players. Without finance, there won’t be execution. Bear this in mind;

– Tax compliance is one of the most top-of-mind jobs that require such an orchestrated interplay between tax and finance. But this equally applies to other jobs. Think about operationalising your TP. Tax can set the TP policy, but you will require local teams for the calculations, and the practical modalities like recharging and invoicing;

– Furthermore, in projects we will need our finance friends as well, next to typically legal, treasury and other stakeholders. Whether you are working on a group rationalisation, debt restructuring or post-acquisition integration, you will need the finance team;

– Controversy? Finance will most likely be your first line of defense.

Given the above, it is clear that finance very often will be a kind of shadow tax team. That is why investing in your relationship with them is important. The quality of your relationships determines the quality of your life. So prioritize engaging with finance. Focus on communication. Provide context. Train them properly. It will pay off! Put yourself in their shoes. Try to understand their priorities. Try to get what’s in it for them. The more you can achieve win-win situations, the more effective your tax function will be! If tax and finance are in sync, you will have a happy CFO.

Video credits: Redbull