The Future of Global Taxation
Contributed by Brooke Faulkner
16 January, 2018
Tax automation is changing the nature of the accounting industry, but because corporate auditing and consultation will be in high demand for a long time, accountants should simply think differently about the kinds of opportunities. Globalization and EU's new GDPR regulations, for example, has opened up a great need for consultants in international tax law.
The small business world now has more options than ever: for example, tax automation is replacing manual data entry. However, according to QuickBooks, "[Far] from being a death knell for the profession, automation should be seen as a massive opportunity for reinvention. Eighty-nine percent of small businesses say they are more successful when working with an accounting professional."
Therefore, while the focus has shifted from manual data entry to accounting software and consulting, there is a very real need for tax advisors who understand international tax law. Lowtax offers a Global Incorporation Guide that can aid with understanding different global jurisdictions, corporate vehicles, and tax structures.
The EU General Data Protection Regulation (GDPR) is set to go into effect this coming May, and it will apply to all businesses based out of the EU – including UK accountants and any company data tied to citizens of the EU. In other words, GDPR regulations likely won't be limited to European businesses since many multinational corporations have clients and customers based out of the EU. Privacy regulations will require understanding who has access to customer data and providing customers with an "opt-out" policy or securing their consent whenever their personal data is shared. Certain privacy breaches must be reported to the Information Commissioner's Office (ICO), as well.
Because the current tax landscape is rapidly changing, tax consultation is becoming more important than ever for corporations to effectively comply with new transparency standards – especially via the OECD/G20 BEPS project (Mandatory Disclosure Rules). The potentials rules for taxing the digital economy provide yet another reason why tax consultants will continue to be highly in demand throughout the coming year for businesses of all sizes.
Taxation Careers Poised for Growth
There are a number of accounting and taxation-related careers poised for growth in the United States over the next decade, including judicial clerks at tax court, financial planning consultants, certified public accountants and/or tax lawyers at accounting or law firms, and associates at the IRS Office of Chief Counsel.
Attorney advisors and law clerks assist judges in overseeing tax cases, often performing legal research, drafting findings and digesting information about cases scheduled to be tried before a judge. Their primary responsibilities may include providing counsel, researching laws and previous cases relevant to the case at hand, and writing periodic reports on court proceedings. Since the U.S. Tax Court's stated mission is "to provide a national forum to expeditiously resolve disputes between taxpayers and the Internal Revenue Service while carefully considering the merits of each case and ensuring the uniform interpretation of the Internal Revenue Code," the responsibility of a tax clerk is anything but light. Tax judges travel nationwide to conduct trials, and there is a small tax case procedure for trials dealing with amounts less than $50K.
Financial planning consultants – also known as financial advisors – often work with the finance or insurance industries. Many are self-employed, allowing the freedom to meet with clients on evenings or weekends. They provide financial information and knowledge concerning taxes, investments, insurance, estate planning, and retirement. U.S. News and World Report named it the third best business career, likely because it is fast-growing – projected to grow at a rate of 30 percent through 2024. This growth is driven, in part, by the ongoing retirement of baby boomers with the need for financial planning advice.
Although the line between lawyer and CPA is often blurred, there are legal guidelines and areas of expertise held by each respective profession. Certified public accountants must pass the CPA exam given by the American Institute of Certified Public Accountants (AICPA), and there are related positions such as internal auditors and management accountingboth of which have their own qualifying exams. Lawyers at accounting firms, on the other hand, must pass their state's bar exam after completing law school – requiring significantly more time and investment – though CPAs do sometimes earn an MT or JD/LLM in Tax, qualifying them to serve in both capacities.
Working for the IRS Office of Chief Counsel often requires an LLM in Taxation. The office provides many varied opportunities, including the ability to be exposed to key casework and litigation all over the country, legal experience in Washington D.C., exposure to cross-agency issues (between the Department of Treasury and the Department of Justice, for example), and meaningful public service.
Lastly, working for one of the top nine management consulting firms is still a great way to catch a glimpse of the way the whole process works – and the place many aspiring freelancers get their start, as well.
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There's a great deal of activity on the forefront now that the new corporate tax rates are set to go into effect this month, though most will likely not see the overall results until 2019, when 2018 taxes are filed. Until then, there will likely be a flurry of activity and demand for trained tax professionals, so the future looks promising as we begin the new year. Share your thoughts on global tax trends in the comments section, below.
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