KPMG: Tax departments left out of the cloud

By Rob Starr, Content Manager, Big4.com

Tax departments are being left out of discussions as their companies consider moving operations to the cloud,  according to results of a survey by KPMG LLP, the U.S. audit, tax and advisory firm. This rasises the possibility of tax risks, lost cost-saving opportunities and decreased return-on-investment for cloud projects.

A significant majority of more than 200 respondents from a cross-section of U.S. companies also said they have not been involved in updating their CFO or board on tax issues related to the cloud nor could they say definitely when their own department is likely to use cloud to its fullest extent, the survey revealed.

When asked about the tax challenges facing their companies as they begin utilizing cloud technology, 40 percent of tax executives said identifying how the use of cloud expands or contracts a taxable presence in the United States and foreign jurisdictions is their biggest challenge; 27 percent cited overall compliance issues, such as withholding taxes and state and federal taxes; and another 27 percent pointed to information technology (IT)-related issues, such as server location and service-level commitments from third-party providers.

“The fact that there currently appears to be limited connectivity and virtually no joint strategic planning between tax and other corporate functions highlights a critical gap – one that can create an opportunity for organizations that think differently and develop IT service delivery approaches that are much more tax efficient,” said Rick Wright, KPMG’s Global Cloud Enablement Leader.