Why did you choose to pursue a career in tax? Was there an ‘aha’ moment? If so, please describe.
Prior to joining Deloitte China in 2005 to pursue a career in Tax, I was a chemical engineer, lawyer and financial controller. Since then, I started an exciting journey which I enjoyed beyond my imagination. Like Benjamin Franklin said: "In this world nothing can be said to be certain, except death and taxes". I have been amazed to witness how important tax is to everyone and every enterprise and how sophisticated, respectable and sort of attractive tax specialists are from clients' perspective. When my tax and legal advices were taken by the clients, it helped them to overcome challenges that were blocking their progress, and assisted them to create value to the business. I feel proud of choosing tax as my life-time career.
From your career, is there a particular deal that sticks out to you as a turning point, or watershed moment for you, and why? What did you learn or take away from that deal?
There was a particular deal from with big business opportunities and afterwards, a new service line was built in Deloitte Tax & Legal China. In 2007, a foreign investor acquired a shell company which owns a piece of land to develop. Initially, they only had the general manager, project director and a public relations manager on the ground. They urgently needed support on managing the post-acquisition matters, handling the daily administration and operations. Because of my diversified work experience in legal, accounting, tax, and treasury in both Singapore and China, I was selected as the engagement manager to support this client, and successfully helped them during transition period and also in building an in-house team.
Later on, I had won a similar case where one of US’ top universities had established a Wholly Foreign Owned Enterprise in Shanghai and wanted to outsource its back-office functions to a reputable accounting firm. By then, I believed there was an emerging market opportunity for outsourced back office services; the target market being the foreign owned enterprises with Chinese subsidiaries. And they would want one portal to handle everything instead of communicating with different parties. I then talked to the management team and with their approval, I started building a new service line, BPS (“Business Process Solutions”), in China from scratch. The BPS team aims to provide a one-stop-shop outsourcing services including accounting, tax, HR, treasury, IT, supply chain, project management, CFO services, and other business advisory services. The team has been growing with two digits for 10 years. The abovementioned two deals taught me that we should stay alert in the market to sense the clients' needs even before a solution is developed. Just like a Chinese saying, "Win from the get-go".
What do you consider to be the greatest achievements of your career to date?
Be a pioneer to pull off the growth where there is no playbook to follow. I have built the China BPS team from scratch; have developed a cloud-based, integrated and one-stop digital solution Qin Qi Tong serving clients from various back office angles like Finance, HR, Tax, Supply chain, BI, Treasury, Contract Management, etc.; have led the China Indirect Tax with a 34% YoY (year over year) growth in FY21; and have acquired a fast growing company offering end-to-end technology consulting and implementation services in Customs-related business.
Tax work in the pandemic era
What kind of challenges did you face adapting to the workplace amid the pandemic?
The biggest challenge was people management. The pandemic has caused a lot of people to re-evaluate, particularly when it comes to work. After spending a period of time working at home, some didn’t want to go back to the office, preferring the flexibility of remote work. Others were simply burned out from logging long hours while also balancing childcare and remote school, sometimes all at once. There are also a large number of workforces who are re-planning their career path. This phenomenon permeates across industries and all companies need to figure out enhanced solutions to retain their people and attract new talents.
Are there any initiatives that you have observed which you feel may help your clients deal with the repercussions of the Covid-19 pandemic?
During the pandemic, many of my clients face cashflow pressure. I've helped my clients explore possible solutions to improve their cashflow position. For example, qualified taxpayer can apply for refund of incremental excess input VAT. Companies may aware of this opportunity, but they were unable to satisfy the conditions. I helped some clients restructured their supply chain arrangements and changed input VAT credit claim time schedule to get entitled to this incentive, and successfully got cash back in an effective manner. One of my clients have got RMB 50 million (approx. US$7 million) cash back through this incentive plan, a timely help to ease the cash flow pressure.
Meanwhile, given that China has quickly controlled the pandemic and resumed work, many MNCs are relying on China subsidiaries’ cash to support the working capital at the headquarter level. While under China foreign exchange control rules, the money moves in or out of China should be supervised and monitored by banks which are empowered by SAFE (“State Administration of Foreign Exchange). Successful cross-border remittance especially for non-trade items, certain conditions should be met, and sufficient documents should be provided to bank to prove the genuineness and compliance of the transaction. Many companies have difficulties in understanding the requirements or failed to effectively communicate to banks which then resulted in the cash couldn’t be remitted out. I am leading the China foreign exchange service team and helped many clients on their cash repatriation to their overseas headquarters.
What is the most significant change to your region/jurisdiction’s tax legislation or regulations in the past 12 months?
Climate change will be a defining issue for the authorities and businesses alike in China, in Asia Pacific, as well as in the whole world for the next decade and beyond. On 22 September 2020, President Xi of China declared in the 75th UN General Assembly that the carbon emission in China will be peaked in year 2030 and it is expected to become carbon neutral in China by year 2060. This commitment requires an unprecedented large-scale transformation of the economy.
To achieve the commitment, the Chinese government has published a series of detailed implementation plan on carbon neutral, include preferential tax treatments of Decarbonisation. It is suggested for the companies to design of implementation plan of transformation of decarbonisation, re-modelling the supply chain, build-up technology platform to achieve efficiency and sustainable supply chain management, and also review the process to fully utilize the tax incentives and preferential tax treatments.
What was one of the most interesting deals you worked on in the past year and why?
The most interesting deal I worked on in the past year was the acquisition of a fast-growing technology company. This deal enables Deloitte China to excel in multiple Customs service dimensions to provide end-to-end solutions and enables us to meet growing demand in Customs technology consulting and implementation areas.
What potential other legislative/regulatory changes are on the horizon that you think will have a big impact on your region/jurisdiction?
With the newly launched electronic tax invoices implementation rules in the region, the companies are facing big challenges on process transformation which in turn will trigger remodelling of supply chain management, accounting report and tax compliance.
A career in tax career in tax
What key piece of advice would you give to young attorneys just getting into a firm or entry-level job? Is there something you wish you knew when you were first starting out?
Be courageous and be patient. For the young attorneys, laying a solid foundation is critical. You should be ambitious, but you should not be hasty. Just like a Chinese saying, "fool's haste is no speed". It takes time.
Money follows value. Value follows differentiation. Identify the specialized area you would like to root in head on and become a true specialist in this regard.
What does your firm do to nurture and promote talent? Do you think it compares well to others in your market in this area?
Talent is at the core of our business and Deloitte has been offering a "High Value, High Touch and High Tech" (3H) talent experience for about five years to date. We adopt lifetime learning and development programs including structured learning modules, virtual sessions, thought leadership sharing and networking, mobility opportunities and participation in specific strategic projects. We design different talent models to address talent diversity, business models changes and inorganic growth. Under each talent model, we have clearly defined the career path, competency framework, learning and development system, career coaching and performance management to support the career advancement of our talents. Our continuous innovation and forward-thinking approach in digitalizing talent management is another key reason for us raising the bar. Digital tools such as Cura, D.Coin, SuccessFactor and AI embedded technologies have enabled advanced and personalized experience in talent attraction, retention and development, which will prepare our people to get ready for the future.
I'm proud to see that our efforts have paid offDeloitte China has been recognized by "Top Employer China" for 15 years consecutively. We are committed to developing our talents into the leaders of the future so as to redefine and elevate the professional tax industry.
If you could introduce one new policy in the legal profession what would it be?
A policy that could incentivize more on Environment Protection. No one should stay away from this including legal professionals.
What does the tax function of the future look like?
Nowadays, the business leaders expect and embrace a new role for the tax function. Companies are positioning themselves to thrive post-pandemic by shoring up their finance, accelerating digital and sustainable transformation, embedding new ways of working, and identifying new grow opportunities. This creates a new business partnering and collaboration imperative for company tax functions. The C-suite can no longer afford for their tax teams to be consumed by routine compliance and reporting activities. Aspirations for tax to add more strategic value must be realized sooner. This means redrawing the boundaries of what tax functions focus on. It also necessitates accelerating the adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time to provide deeper advisory support for their business counterparts. In plain words, the tax function of the future will truly become a department that cooks the future, rather than savouring the past.
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