The preeminent association of in-house tax professionals worldwide has published a comprehensive survey of corporate tax departments. TEI's 2011-2012 Corporate Tax Department Survey — a compendium of summary results, analysis, third-party commentary, and an online stratification tool to create customized tables of results — enables tax executives to benchmark more effectively and efficiently.
More than 500 companies participated in the 67-question survey, which updates a similar survey conducted in 2004-2005 revealing critical changes and emerging trends.
The survey's online tool, explains TEI President Carita Twinem, "slices and dices data in many ways to produce valubale information by company size, tax department size and budgets, and industry. The result is an impressive array of benchmarking information that TEI members and others will find invaluable."
Written commentary in the publication includes detailed articles by well-known tax experts on three areas: risk management, the use of software, and changes in controversy activities.
See a sample page from the book, or a snapshot of the online tool.
Major findings of the study include:
Performance Management: The most common measurement used to evaluate the tax department’s performance was “lack of surprises” (72%). Other measures included the results of audits (cited by 60%), meeting compliance deadlines (59%), cash taxes (57%), effective tax rates (53%), measurable tax project objectives (53%), and staying within the department budget (51%). Big increases in evaluation measures were seen for cash taxes (48% used in 2004, 57% today) and economic profit/value added (9% used in 2004, 34% today).
Significant Deficiency/Material Weakness: Fourteen percent (14%) reported that the company received a significant deficiency or material weakness from its financial statement auditors with respect to tax in the past 5 years. Among them, a substantial majority (70%) were able to remediate the deficiency or weakness in 1 year or less.
Company size and location: The majority of companies responding (63%) have consolidated worldwide revenues of more than $1 billion, which tracks closely with the findings from the 2004-2005 survey at 60%. Almost three-quarters (73%) of this revenue comes from the United States (8% comes from Europe, 8% from Canada, and 11% from other parts of the world).
Senior Tax Executive: Similar to the 2004-2005 survey, the majority of senior tax executives have the title “Director of Tax/Corporate Tax Director” (39%) or “Vice President” (39%). Two-thirds (67%) of Senior Tax Executives report directly to the company’s Chief Financial Officer (64% did so among respondents in the 2004-2005 survey). Twelve percent (12%) report to the company’s Controller, 9% to the Chief Accounting Office, and 5% to the Treasurer. The remaining 7% report to someone else in the company.
Number of Employees: Overall, companies responding to the survey have an average 10.6 employees within the tax department and 0.7 contractors (for an average of 11.2 total personnel, compared to 11.4 in 2004-05). Seventy-one percent (71%) have 4 or more total personnel in the tax department.
Tax Department Budget: Overall, just more than half (54%) saw an increase in their tax department’s budget during the past 3 years. Slightly more (64%) reported increases in the same period in the 2004-2005 survey.
Software/Technology: Overall, tax department IT seems to have improved since 2004. Twenty-one percent (21%) report the company’s tax provision software is integrated with the compliance system (15% reported integration in the 2004-2005 survey). In addition, 69% say the company is using an ERP system (55% used an ERP system in 2004).
Audits: About one-third (30%) report an increase in federal/national home-country audits over the past 3 years (59% report no change).
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