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Forbes
19-05-2025
- Business
- Forbes
Bracing for Change and Uncertainty: A New Era for Tax Policy
You wanted interesting times? You got them. With global tax and trade policies now entering implementation stage, Deloitte's newly published report – Shaping the Path Forward – offers timely insights to help decision-makers navigate their way through a period of change and uncertainty. Gathering insights from over 1,100 tax and finance executives across various industries and geographies, the report identifies how these leaders are navigating the paths that lie ahead for global tax. Discussions of international tax reform have been focused on the Organization for Economic Cooperation and Development (OECD)'s Inclusive Framework Two Pillar approach to combating corporate tax base erosion since its emergence in 2021. The 2025 Global Tax Policy Survey reveals that companies are divided in their views about the impact of Pillar Two, particularly when it comes to how it will change the level of tax they will face, and the degree of complexity they will have to deal with. According to the survey results, opinion is divided fairly equally between those expecting to pay marginally more tax (47%) and those expecting to pay meaningfully more (45%) under Pillar Two. And only 5% expect no change on the amount of tax they would have to pay. The Survey found a similar picture on complexity, with 43% expecting more complexity overall and 47% expecting a mix of increased and reduced complexity. Again, only a tiny minority expect no change. Some of this uncertainty is coming from familiar sources, and some from new developments. It will likely take some time for this situation to stabilize and for a settled future path to emerge. Businesses have identified Transparency and Reporting as the most significant policy theme impacting them for the second consecutive year. The Survey reveals a strong expectation that levels of public transparency reporting will continue to increase, driven by a mix of regulatory requirements (including those coming from environmental, social and governance (ESG) sources) and voluntary disclosures (designed to ensure that publicly available data is adequately contextualized). None of this comes at zero-cost, with the burdens being endured by business. What stands out in this year's Survey is the extent to which respondents' concerns about their capacity to execute transparency strategies have eased somewhat compared to last year. Concerns are starting to subside across a range of issues, including aligning governance with messaging, sourcing and verifying data, assessing strategic risks and opportunities, and understanding requirements and standards. With businesses getting ahead of the mechanics of transparency, there is now a need for policymakers to find ways of reducing the burdens currently attached to the transparency requirements, so that the benefits of transparency can be delivered more affordably. There are already positive moves in this direction, but more is needed[1]. Digitalization is seen by survey respondents, for the second year running, as the second most impactful theme. This is an area where change and challenge go hand in hand; the digitalization of tax is expected to happen, but likely at a slower pace than anticipated. It is, therefore, significant that the responses to the 2025 Survey show little overt optimism among respondents. This comes through in a number of ways. First, expectations that the digitalization of tax administration – as exemplified by the OECD's Tax Administration 3.0 model – will simplify matters are lower than those expressed last year. Second, fewer than half of respondents see developments like e-invoicing leading to simplification. Finally, the perceived benefits of greater AI use in tax compliance are somewhat diffuse, and while around a third of respondents expect to see improved accuracy, fewer than a fifth expect the use of AI in tax to free up time and resources to focus on core business functions. Given the centrality of digitalization to the future of tax, it is important that this ambivalence is addressed. For businesses, the priority should be on ensuring that policymakers fully understand and respond to the sources of doubt and reticence. Like Transparency and Reporting, the Sustainability theme is both a source of challenge but also of stability, driven by familiar taxing models (such as carbon taxes and taxes on energy consumption) and established processes (such as the Carbon Border Adjustment Mechanism) that businesses are implementing. A stand-out finding from the 2025 Survey is that only a minority of business (just over a third) report that they are fully utilizing the range of grants and incentives at scale that are available to offset the costs of environmental-driven investments. Most others are exploring their options on incentives and examining if this is the right path to take. In some policy areas, like International Tax Reform, change has been driven by conscious political decisions. In other areas, such as the Future of Work, change has emerged more organically as modern patterns of mobile work, boosted in the post-pandemic world, have given rise to a range of tax issues for employers, employees, and for tax authorities[2]. The picture emerging from the 2025 Survey is one marked by a multiplicity of forms of work, of organizational models and of tax treatments. These give rise to a host of considerations across a range of taxes (is a Permanent Establishment created, when and where does liability for employment tax arise, is VAT registration required?), but not to a common approach globally. Questions around tax liability remain a central concern, but tax policy also plays a role in shaping the labor market flows which, in turn, will shape the Future of Work. The 2025 survey shows that while almost two-thirds of respondents have noted an increasing use of tax incentives or special tax regimes to attract foreign talent; close to a fifth have seen a decrease in the use of such measures. This suggests a level of volatility which will require particularly close monitoring. Arguably, the most significant tax policy development in 2025 is less a tax policy development than a change of approach: it is the emergence of tariffs as one of the principal levers of global policy making. For a world which has grown accustomed to looking at international competitiveness through a tax policy lens, this may require quite an adjustment in thinking. The 2025 Global Tax Policy Survey reveals a complex picture, characterized by a multiplicity of moving parts, a mixture of continuity and disruptions, and above all tax policy that continues to evolve in both expected and unexpected ways. There can be no one-size-fits-all prescription for how best to pick a path through this landscape. However, what can be safely prescribed is a proactive response in which companies calmly assess the situation across their global tax policy landscape, and broadly allocate resources to one of three buckets: One will contain the business-as-usual areas where the focus needs to be on routine implementation and compliance; Two will contain the areas where the current arrangements are sub-optimal, and therefore businesses need to engage with policymakers to secure policy change; Three will contain the issues where uncertainty and disruption abound and where the key focus is on closely monitoring developments and assessing risks and opportunities. Deloitte's Shaping the Path Forward offers some indispensable insights into the challenges likely to be encountered as part of this process. Read the Deloitte 2025 Global Tax Policy Survey to learn more.
Yahoo
02-04-2025
- Business
- Yahoo
Tax Systems acquired by Providence Equity Partners
Providence Equity Partners has acquired Tax Systems, a UK-based tax and accounting software provider, from Bowmark Capital. Financial terms of the transaction were not disclosed. Providence, a firm specialising in investments across media, communications, education, and technology sectors, stated that its funding will drive Tax Systems' ongoing platform growth and innovation. The investment aims to enhance tax and regulatory compliance solutions while expanding into both established and new markets. Established in 1991, Tax Systems provides software and solutions designed to digitise tax compliance, allowing tax professionals to automate workflows, improve compliance, reduce risk, and extract valuable insights from their tax operations. According to Providence, the company supports a client base of more than 1,500, including multinational corporations, more than 80% of the leading accounting firms in the UK and Ireland, and around 40% of FTSE 100 companies. Providence senior managing director and co-head of Europe Karim Tabet said: 'We are excited by the opportunity to partner with Tax Systems. Throughout Bowmark's ownership, the company has developed into a specialist leader in regulatory and compliance software. We believe this is a large and fragmented category, with constant changes and strong digitisation trends that provide potential for numerous growth avenues.' Since being acquired by Bowmark in 2019, Tax Systems is said to have doubled both its revenue and profits. The company, which was listed on AIM, has built a cloud-native, multi-tax technology platform and recently introduced Pillar2, an AI-driven SaaS solution designed to navigate the complexities of the OECD's global Pillar Two compliance and reporting requirements. Tax Systems CEO Bruce Martin said: 'We have enjoyed an excellent and rewarding partnership with Bowmark, whose support has been instrumental in strengthening our position in core markets, expanding our product suite, and successfully entering new geographies. 'As we move into our next phase of growth, we are excited to be partnering with Providence, who recognise the strength of our business and the significant opportunities ahead. Their support will help us accelerate our expansion and innovation as we continue building the leading tax compliance software platform in EMEA.' In December 2023, Tax Systems announced the acquisition of TaxModel, a Dutch company specialising in tax technology. "Tax Systems acquired by Providence Equity Partners " was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
07-02-2025
- Business
- Yahoo
ILMN Q4 Earnings Miss Estimates, Stock Dips in Aftermarket
Illumina Inc. ILMN reported fourth-quarter 2024 adjusted earnings per share (EPS) of 86 cents, which missed the Zacks Consensus Estimate of 92 cents by 6.5%. The bottom line was significantly above the year-ago quarter's level of 14 cents. Find the latest EPS estimates and surprises on Zacks Earnings Calendar. The adjustments exclude the impact of GRAIL's pre-acquisition net operating losses on GILTI, the utilization of U.S. foreign tax credits and the Pillar Two global minimum top-up tax, which became effective from the first quarter of 2024. Including one-time items, the company's GAAP EPS was $1.17 against the year-ago reported loss of $1.11 per share. Full-year adjusted EPS was $2.45 compared with the year-ago level of 86 cents. The figure missed the Zacks Consensus Estimate by 40.7%. Following the earnings announcement, ILMN stock fell 4.9% at the after-market trading yesterday. Revenues amounted to $1.10 billion, down 1.6% year over year (down 1% at CER). However, the top line beat the Zacks Consensus Estimate by 2.6%. Full-year revenues totaled $4.37 billion, down 2.8% from the 2023 level. The figure beat the Zacks Consensus Estimate by 1.6%. Illumina has one reportable segment — Core Illumina. Core Illumina's revenues totaled $1.10 billion (up 1% year over year). The growth was due to the company's high-throughput consumables business, NovaSeq X placements and encouraging uptake from clinical customers. Core Illumina sequencing service and other revenues totaled $151 million, down 1% year over year. Sequencing consumable revenues amounted to $698 million, up 2% year over year, primarily due to continued strong uptake in X consumables. The company's GRAIL segment was spun off on June 24, 2024. Hence, GRAIL has no reportable impact on the fourth-quarter top line. The adjusted gross margin (excluding amortization of acquired intangible assets) was 65.9%, up 587 basis points (bps) year over year. Research and development expenses decreased 24.9% year over year to $256 million. SG&A expenses totaled $279 million, down 42.5% from the year-ago level. The adjusted operating profit in the quarter was $193 million against the year-ago quarter's operating loss of $152 million. Illumina exited 2024 with cash and cash equivalents of $1.13 billion compared with $1.05 billion at the end of 2023. Cumulative net cash provided by operating activities at the end of the fourth quarter was $837 million compared with $478 million a year ago. Illumina provided its outlook for 2025. The company expects full-year Core Illumina revenues to be in the range of $4.28-$4.40 billion. It expects constant currency revenue growth to be in the low single digits. ILMN expects Core Illumina's non-GAAP operating margin to be 23% in 2025. Illumina, Inc. price-consensus-eps-surprise-chart | Illumina, Inc. Quote Non-GAAP diluted EPS is projected to be in the range of $4.50-$4.65 in 2025. The Zacks Consensus Estimate for full-year EPS is currently pegged at $4.42. Throughout the fourth quarter, Illumina made headlines on many occasions. It collaborated with NVIDIA to enhance the analysis and interpretation of multiomic data. The company also collaborated with Regeneron and invested in the Truveta Genome Project to extend the DNA sequence-linked healthcare database to advance scientific innovation and healthcare delivery. Illumina launched pilot proteomics program with UK Biobank and biopharma collaborators to analyze 50,000 samples. Additionally, it announced the expansion of TruSight Oncology, the latest solution to enable comprehensive genomic profiling of tumors. Illumina exited the fourth quarter on a mixed note, wherein earnings missed estimates but revenues beat the same. The company's innovative solutions are facilitating the next wave of progress in genomics and multiomics. The expansion of gross margins is impressive. ILMN continues to navigate a challenging global macro environment where customers are still constrained in their purchasing decisions. However, the company achieved additional cost savings from greater manufacturing and logistics efficiencies, contributing more than $100 million in cost savings in 2024. Illumina currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the broader medical space are Quest Diagnostics DGX, ResMed RMD and Cardinal Health CAH. Quest Diagnostics reported fourth-quarter 2024 adjusted EPS of $2.23, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.62 billion beat the Zacks Consensus Estimate by 1.9%. DGX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. DGX has an earnings yield of 5.9% compared with the industry's 4.1%. The company beat on earnings in each of the trailing four quarters, the average surprise being 3.8%. ResMed, carrying a Zacks Rank #2 at present, posted second-quarter fiscal 2025 adjusted EPS of $2.43, which topped the Zacks Consensus Estimate by 5.6%. Revenues of $1.28 billion exceeded the Zacks Consensus Estimate by 1.6%. RMD has an estimated fiscal 2025 earnings growth rate of 21.9% compared with the industry's 13.2%. The company's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%. Cardinal Health, carrying a Zacks Rank #2 at present, posted second-quarter fiscal 2025 adjusted EPS of $1.93, which outpaced the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion exceeded the Zacks Consensus Estimate by 0.7%. CAH has an estimated five-year earnings growth rate of 10.7% compared with the industry's 9.3%. The company's earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quest Diagnostics Incorporated (DGX) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report Illumina, Inc. (ILMN) : Free Stock Analysis Report ResMed Inc. (RMD) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research Sign in to access your portfolio
