Tax Tip: What’s On the Horizon for C-Suite Leaders Ahead of Pending Tax Legislation?

With the many tax changes on the table for 2022, it’s safe to say tax will continue to be in the headlines next year. Leaders should consider three major aspects of the tax landscape that will be affected as changes roll out next year.

Scenario Planning

A recent KPMG survey found that just 31% of leaders are using their organization’s tax data to scenario plan and model for changes to the tax landscape. It is likely that we’ll see this number increase in 2022—as it should, if tax leaders are reading the tea leaves—as modeling can help organizations to meet the challenges of a changing tax environment.

Environmental, Social, and Governance

What truly sets tax apart when it comes to environmental, social, and governance, or ESG, is that tax data is both a measure and a driver; it is a way for companies to both measure progress and drive momentum. In 2022, organizations need to be more creative and find ways to apply both the measure and driver aspects of tax data to their advantage.

Tax Credits

Tax credits have long been a mainstay in the tax world, but things might look different in 2022. Tax incentives that previously allowed companies to dip below the 15% margin would need to be repealed, as they would invalidate the forthcoming global minimum rate. This would mean tax leaders will need to be prepared to make changes to their policies—and fast.

There’s no crystal ball that can help us see into the future, but leaders can already begin to think through what tomorrow might bring and how they can position themselves for success in 2022.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Greg Engel is the vice chair of tax at KPMG LLP where he oversees a team of more than 10,000 partners and professionals across all tax disciplines..

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