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Tax departments have traditionally been viewed as compliance functions, primarily responsible for ensuring regulations are followed and filings are submitted correctly. But forward-thinking tax leaders are increasingly demonstrating that tax can contribute far more to the organisation.
During a presentation at this year’s Thought Leader Global tax event in Amsterdam, Daniel Jakobsen from Falck shared practical insights into how tax teams can reposition themselves within a business; not as a cost centre, but as a strategic partner delivering meaningful insights and measurable value.
Compliance will always exist – and it can drive insight
Tax compliance will never disappear, in fact with the digitalisation of the tax reporting process where tax authorities will ultimately do the VAT returns for you, tax compliance will become even more stricter to ensure better quality of data. Filing obligations, regulatory oversight and stakeholder expectations ensure that tax departments must maintain strong stewardship over compliance processes.
However, compliance data itself can be extremely powerful when analysed properly.
Daniel shared an example from his organisation’s tax transparency reporting initiative, where data from multiple business units was consolidated and analysed.
When the data was reviewed, something unexpected appeared:
- Business units operating similar ambulance services across different countries showed significant differences in non-deductible VAT levels.
- Some units had 10% non-deductible VAT, while others had 40%.
This was not previously visible to the business. Once the difference was identified, it triggered deeper investigation and internal discussion to understand the underlying reasons.
The lesson is clear: Tax data can reveal operational insights that the business would otherwise never see.
Tax should focus on demonstrating value, not claiming profit
Daniel emphasised that tax departments should avoid framing their role as “generating profit.” Instead, the real value comes from:
- Reducing unnecessary costs
- Improving financial processes
- Ensuring tax outcomes are correct from the start
These improvements create measurable financial benefits for the organisation. However, this value must be quantified and documented.
Tax teams should ensure that:
- Improvements are translated into numbers stakeholders understand
- These numbers are tracked and monitored
- Evidence can be presented whenever justification is required
Without this, the value created by tax teams may remain invisible.
Speaking the right language to the right stakeholder
One of the most important skills for tax leaders is the ability to adapt their message depending on the audience.
Daniel explained that different stakeholders respond to very different narratives.
When speaking with the CTO
The conversation should align with the organisation’s technology strategy.
For example, if the company’s direction is “cloud first”, then tax solutions should be positioned accordingly:
- Cloud solutions provide continuous updates
- They reduce dependency on individual employees
- They improve system resilience and business continuity
Daniel noted that although the tax team could build their own tax engine, doing so would create long-term risk if key individuals left the organisation.
Instead, aligning with the cloud strategy supports the broader technology vision.
When speaking with the CFO
The conversation should focus on:
- Risk management
- Cost impact
- Financial opportunity
For finance leadership, the most relevant discussion points are risk reduction and measurable outcomes.
Understanding these perspectives allows tax leaders to gain stronger support across the organisation.
Tax transformation is ultimately about people
Despite the increasing focus on technology, Daniel emphasised that the most important factor remains human interaction.
Relationships across the business are critical.
Simple interactions – conversations in meetings or even discussions by the coffee machine – often reveal valuable information about projects, risks, and upcoming initiatives.
Being present and approachable makes the tax function easier to engage with.
Early engagement is where tax creates the most value
One example highlighted how tax teams often become involved too late in business initiatives.
Daniel described a situation where a business unit planned to launch operations in a new country.
The local leadership initially planned to involve tax only after contracts had been signed, expecting the tax team to fix any issues afterwards.
Daniel challenged this approach by reversing the situation.
He asked the business leader:
“If I negotiated a commercial contract with a client and then asked you to adjust the price after signing, when would you want to be involved?”
The answer was obvious: Early in the process. This reframing helped the business recognise that tax must also be involved before key decisions are finalised.
Early involvement allows tax to:
- Identify risks
- Structure transactions correctly
- Avoid costly changes later
The role of Tax is expanding
Tax teams today face increasing regulatory complexity, new reporting requirements, and constant system changes — often with no increase in resources.
To succeed in this environment, tax departments must:
- Use data more effectively
- Communicate value clearly
- Build strong relationships across the organisation
- Engage early in business decisions
Those that succeed will transform tax from a reactive compliance function into a strategic contributor to business performance.
Key Knowledge Points (For Your Knowledge Repository)
Below are clearly defined principles extracted from Daniel’s discussion.
Principle 1 – Compliance data can create business insight
Definition: Tax data collected for compliance purposes can reveal operational and financial patterns that provide valuable insight into business performance.
Example: Comparing non-deductible VAT percentages across similar business units revealed significant differences that were previously unknown to the organisation.
Implication: Tax teams should treat compliance data as an analytical asset, not just a reporting obligation.
Principle 2 – Tax creates value through cost and process improvement
Definition: The value delivered by tax teams primarily comes from cost avoidance, cost correction, and process improvements, rather than profit generation.
Key Actions:
Tax teams should:
- Identify financial impacts of improvements
- Quantify savings or cost avoidance
- Monitor and track value created
Implication: If tax value is not measured, it will often go unnoticed by leadership.
Principle 3 – Stakeholders require different narratives
Definition: Tax initiatives must be communicated in language that aligns with the priorities of different stakeholders.
Examples:
| Stakeholder | Key Narrative |
| CTO / IT | Cloud strategy, system resilience, reduced dependency |
| CFO | Risk management, financial impact, opportunities |
| Business units | Operational efficiency, speed, and commercial outcomes |
Implication: Effective tax leaders tailor their messaging depending on the audience.
Principle 4 – Human relationships are critical to tax effectiveness
Definition: Tax effectiveness within an organisation depends heavily on relationships and informal interactions across departments.
Examples:
- Conversations in meetings
- Informal discussions in shared spaces
- Continuous presence within the organisation
Implication: Tax teams must be visible, approachable, and engaged with the wider business.
Principle 5 – Early Tax involvement prevents costly mistakes
Definition: Tax should be involved before key commercial decisions are finalised, not after.
Example: Engaging tax before signing contracts when entering new markets allows risks to be managed proactively.
Implication:
Late tax involvement often results in:
- Inefficient structures
- Costly corrections
- Operational disruption
