Q&A: David Linke, Global Head of Tax & Legal Services at KPMG
David Linke is the Global Head of Tax & Legal Services at KPMG, leading the firm’s tax and legal services and technology-powered solutions. Speaking to Consultancy.uk, David reflects on how the current global environment has impacted the tax and legal landscape, while also diving deeper into how KPMG member firms are responding, with technology and agility a common theme.
With jurisdictions around the world continuing to adapt to the pandemic and downturn, what are some of the biggest tax and legal impacts you’re seeing on businesses?
Since early 2020, governments have been focused on preserving as much of their economic infrastructure as possible given the economic downturn of Covid-19. A lot of this focus has been on keeping bonds between employers and employees, landlords and tenants, and suppliers and retailers, and this has not gone without a significant expansion of public debt.
While low interest rates mean this is manageable in the short term, a longer-term issue remains. The solution here for many jurisdictions is on driving economic recovery and growth, which raises the question of what tax settings will stimulate that growth and not impede the right kind of investment.
It is not a simple question to answer, and it may involve greater up-front incentives such as capital allowance write-offs or a rebalancing of the overall tax base. Identifying and reducing those potentially more damaging taxes and replacing them with those that have less adverse economic impacts and can drive other aspects of recovery is key.
And of course, one of the main things we’ve seen is the rapid acceleration of transformation within the tax department – though this had already started prior to the current situation. We have seen and will likely continue to see more focus on automation, data and analytics, as businesses their target operating models as we move forward into the new reality post-Covid-19.
On that last point around technological innovation, how is that playing out in the tax department? What are you doing at KPMG to tap into the power of technology?
Even before the challenges of the current climate came into play, many tax leaders were rethinking their target operating models and increasingly looking to technology solutions and different sourcing models, such as the leverage of global delivery centers, to streamline their compliance processes and other repeatable activities within the tax department.
This has only accelerated in the past year, as tax departments work to keep pace with changing legislation, balance the pressures of economic uncertainty and enable remote workforces to deliver.
KPMG firms are helping clients navigate these challenges, and we are investing internally too. Fortunately, we were already heavily invested in technology, innovation and our global delivery capabilities even before this period. As one example, over five years, KPMG is investing $5 billion in technology, people and innovation to accelerate both the digital transformation of KPMG firms and the offer for clients. We’re also investing more than $1 billion in Tax & Legal technology, specifically, to meet growing demand.
As part of this investment, we have set up KPMG Digital Gateway – a single cloud-based platform solution powered by Microsoft Azure that gives clients access to the full suite of KPMG Tax & Legal technologies. Our solution helps clients tackle regulatory change, turn data into value, streamline compliance and planning, while enabling effective collaboration across tax, legal and finance departments.
In addition to Digital Gateway, can you expand on some other key KPMG initiatives surrounding tax technology, innovation and transformation?
We have combined our technology, transformation and compliance capabilities under one single framework called Tax Reimagined. This framework is a top priority for us, as it helps KPMG firms service clients’ needs to not only be compliant in today’s world but ready for the digital world of tomorrow – two concepts that will only grow in importance.
Our team works with clients to develop and implement a customized target operating model for their tax and finance functions, helping them reduce costs, mitigate risks, maintain or improve quality, and drive more strategic value across their organization. Across KPMG firms, these capabilities are further enabled by our global delivery network, which provides technology-enabled and cost-effective delivery of multi-jurisdictional tax compliance activities.
You recently moved from Australia to the UK following your appointment as Global Head of Tax & Legal. What made you want to make this move and what do you look forward to doing most once the UK’s lockdowns are lifted?
Well, the UK is a key market for our tax function, and it is well located internationally from the perspective of time zones and travel connections, so it made sense to be here. The pandemic situation certainly made the situation more complex, but my family and I pulled together and made the move at the start of 2021.
We haven’t had the chance to explore the city much just yet with various lockdown measures in place, so once this is possible, we are really looking forward to visiting many of the historical sites in London and the surrounding area. As a history buff, there is a lot to keep me busy on that front!
About David Linke
Having started at KPMG Australia in 1993, David has taken on various roles within the firm, most recently holding the role of Asia Pacific Regional Leader for Tax, as well as the Head of Tax, Deals and Legal for KPMG Australia, where he was responsible for leading a market-leading tax technology and innovation team in Australia. He now leads the Tax & Legal division globally.
