As MNCs face increasing regulatory complexity and rising expectations from tax authorities, the role of India’s Global Capability Centres (GCCs) is undergoing a quiet but powerful transformation. No longer limited to transactional support, tax functions within GCCs are scaling up in value and strategic importance.
Deloitte’s latest whitepaper, “GCC – The India Advantage: Transforming Global Tax Functions,” sheds light on how Tax Centres of Excellence (CoEs) in India are helping global enterprises centralise compliance, integrate finance and tax, and harness technology and analytics for smarter, faster, and more resilient tax operations. We unpack key insights from the whitepaper and what it means for the future of global tax.
The back-office functions of Global Capability Centres (GCCs) are at the forefront of changes they evolving from the routine tasks to strategic work being done for tax compliances across multiple geographies. GCCs in India have emerged as strategic hubs for tax-related functions, being driven by expertise, technology, and cost efficiency.
The scale at which it is happening, GCCs have become integral to the global tax ecosystem, giving companies the edge in managing the tax functions, a whitepaper by consulting firm Deloitte says. Companies looking to establish a tax centre of excellence, integrate finance and tax functions, or optimise global mobility and payroll processes, India’s GCCs are the hubs of action.
The shifting nature of work is creating opportunities for GCC to add value to the work they may be doing with their global parent or a wider set of companies.
Appliance of Compliance
The tax CoE located in India is being set up to support multiple geographies. Companies have traditionally had tax management functions in each country, adding to costs and inefficiency. A centralised hub in the GCC for functions such as corporate tax, indirect taxes, transfer pricing, customs & trade, and payroll processing is adding efficiency like never before. Technology is at the heart of the change, while it helps cut costs, standardise processes, improve decision-making, and improve risk management.
The effort by the tax function is to centralise the challenges faced, some of which are unique to specific geographies, and to distribute the ease of use for enterprises.
Not everything may be as easy, though. It is easier said than done to integrate the existing processes, balancing the enterprise’s business goals along with the local tax regulations. Given the nature of tax compliance that each country needs, there are constraints around technology integration that need attention. As the advisory companies build the AI-driven tools for tax management of routine tasks, it could still take time for a final, ‘single source of truth’ – a term often used by the taxman – to emerge.
While the early stage of scaling up and innovating for the tax function is what could add value. The GCC transforms the enterprise into a data-driven powerhouse by harnessing advanced technology such as business intelligence and other tools from technology partners to drive advanced analytics and strategic decision-making.
What’s driving the tax GCC?
India headquartered companies that have an in-house expertise with tax and finance teams have found it easier to set up a tax centre of excellence. Companies also must identify which tax functions would be managed by the tax centre of excellence – direct tax, indirect tax, transfer pricing processes, or a combination of these functions, the Deloitte whitepaper says.
Process-driven or transactional work is typically low-risk work that companies have been seen to move to the India GCCs. Companies can look to transform their businesses by integrating technology, even as they collaborate with their in-house technology and tax teams to initiate process automation. The aim should be to reduce the resource burden for potentially important and high-risk tasks. Various companies may be in different stages of preparedness and may need a more customised approach.
The integration between tax and finance department is essential since it breaks down the traditional silos between the two, allowing companies to achieve improved data quality, compliance and operational efficiency. It also allows the financial professionals to move away from the transactional work to the more important decisions for the finance function.
As global organisations embrace evolving workforce models, GCCs are investing in advanced systems offering real-time data, seamless integration, and analytics capabilities, allowing for informed decision-making and a personalised EX, the Deloitte whitepaper notes.
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