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Identify appropriate tax structures for transactions to reduce tax risk

The program “Intro to taxes - Strengthen your competitive advantage” will get you there

Moving from 'Learning' to solving a 'Real Business Issue'

Focus on solving a business issue

Learning returns the highest benefit when it is properly applied to solving real business problems. We recommend the line manager and the employee agree on measurable goals that will address known business issues.

The employee might then need to attend a development program such as this workshop. The objective is not just to attend a workshop, but rather to increase the employee’s business and financial acumen, and as a direct result of this development program, identify and help achieve specific, measurable, value-creating performance goals. To illustrate moving from learning-related goals to performance-related goals, we have prepared the following suggestions, which of course should be modified to meet the specific needs of the line manager and employee.

A business issue is on the table
Manager asks employee to solve the business issue
Training takes place with the issue in mind
Employee focuses on solving the issue
Employee reports outcome

  • Issue needs to be solved asap
  • Employee is unclear how to do that
  • Definition of KPIs to solve the issue
  • Training will be recommended to help solve the issue
  • Maybe a workshop
  • Maybe on-line
  • Employee addresses the issue with the newly acquainted knowledge
  • Employee shares how it was possible to meet the KPIs
  • Issue is solved

Value creating performance

Value-Creating Goal

Given a stronger taxation knowledge, once the client’s needs have been identified and after discussion with BD (the unit Business Development), create value for the business by

  1. identifying the optional tax structure for a transaction, and
  2. identify tax risks of 2 recent transactions,
  3. mitigate task risks and punitive damages. Discuss these points with your XFT leader, BD, or your local tax expert.

Suggested application tasks in order to meet the above-mentioned goal

After selected client meetings, consider any specific tax matters raised and provide at least one suggestion of a possible solution. (However, it is important that advice on tax matters is avoided, thereby preventing any potential legal ramifications for litigation against Swiss Re). Your suggested solution should be presented to a client executive. From these findings a series of tangible actions should now be followed through with the ultimate goal to add one of your ideas to the business pipeline.

Summary

Addressing business issues - in a context of learning - promises to produce impressive ROIs.

When we consider all the benefits and costs, this type of training/development investment creates significant value and provides impressive quantifiable returns, both for the employee and for Swiss Re. Therefore, this approach moves us far beyond "just learning something"; it focuses us on the positive business outcomes by quantifying the expected costs and resulting value creation.

Our Thoughts – the Return on Investment (ROI) Calculation

This activity promises a strong ROI of 304%

The sections below reveal our calculation.

Select each thought (+) to learn more about it.

Overall benefits include:

  1. mitigate tax risk,
  2. avoid punitive damages in the tax area
  3. help clients to maintain a competitive advantage in large transactions

Quantifiable value: An initial cost estimation of dealing with an average tax issue in the financial services industry may add up like this:100 hours work is needed for internal remediation (170.- * 100); plus US$ 500’000 need to be calculated for external cost.

Participation in this program reduces the risk of encountering tax issues by 1% , which calculates the follows: US$170*100 +500,000*0.01=US$5,170.

Non-quantifiable value: Besides this measurable value, there are also non-quantitative benefits of this workshop. For example, the value of enhancing finance and business acumen/competencies of the employee, plus the enhancement of work quality, which often materialize over time.

Assume the cost of participating in the one half-day training is US$300 which is the Swiss Re average cost.

Also assume the opportunity cost for being away from the desk for half day is US$700.We can assume that half a day of work is required to apply the findings and to achieve the above-mentioned performance goal, which adds an additional US$700 opportunity cost for not being productive.

Therefore, the total cost of this learning investment is assumed to be US$1,700 (US$300 + US$700 + US$700).

The ROI in this case equates to a high 304% (US$5,170/US$1,700).

Don’t forget this ROI calculation is not considering the above-mentioned non-quantifiable value.

Additional savings could result since the savings could reoccur in subsequent years and the learnings from the workshop could be applied to other situations. In your own individual case, the numbers may differ, our intention here is to offer an example for creating your own ROI calculations.
Agree on your goal
Structured learning
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