The three ages of tax

Here’s a potted summary of part of the discussion at an International Tax Meeting I attended in December which was organised by the CIOT/ATT London Branch and Commerce & Industry Branch. It was kindly hosted by Mazars and held under the ‘Chatham House’ rules – so I won’t mention any names, except that the meeting was ably chaired by my former colleague Ray McCann and the panel included Alexandra Buchan from RELX plc, Catherine Harlow from AstraZeneca plc and Lee Holloway from Next plc.

  1. The essence was that there were three ages in the evolution of the tax function for corporates:
  2. Form-filling: tax as a purely administrative function.
  3. Value-add: seeking opportunities to make substantial tax savings, often through artificial structures.
    Governance: tax influencing the governance of the group (‘tax in the boardroom’), and governance influencing the management of tax (including the interaction with internal audit and compliance).

There seems to be some truth in that, although my view is that if we’re in the ‘governance’ age, we’re at the dawning of that age. There’s still a long way to go in achieving a full understanding of governance, so as to integrate operational, economic and legal substance.

What do you think?