Working With Tax Teams on Institutional Planning

At Loctax, we talk with many in-house tax teams daily. From these conversations, we’ve identified 11 things that effective tax teams do 🎯: 1. Stakeholder management: They’re the best networkers. They stay close to the business, finance, legal, treasury, and external advisors, building strong relationships that lead to better collaboration. 2. Strategic function: They’ve put tax on the map📍. Their organisation has strong tax awareness, and the Head of Tax reports to the CFO, ensuring tax has a seat at every table. For them, tax isn’t a cost centre. 3. Proactivity: They don’t react to upcoming business, regulatory, or macroeconomic changes; they anticipate and address challenges before they arise. They also pick up or support tax-critical work others don’t (legal org chart, stat accounts, etc.). 4. Operational & process excellence: They know process comes first—always. They focus on structured, standardized, and repeatable ways of working, with clear roles and responsibilities. Tax is always about the details. 5. Data-driven: Data is the new gold 🥇. They know that without data, no informed decision can be made. You can’t be the business partner of choice without data readiness. 6. Structured data repository: They turn single-use data into data available for future use by focusing on data capture, sourcing, and storage. This lets them unlock insights: trend analysis, outlier analysis, reports, heat maps, etc. 7. Pragmatic tech adoption: They have a healthy interest in technology but focus on solving concrete tax problems with tools. They don’t jump on the hype train or take on "taxologist" roles. 8. Risk monitoring: They have periodic risk monitoring in place, with a risk register and awareness of global exposures. Risk monitoring is integrated with process excellence efforts. 9. Operationalized controls: They install controls to mitigate risk exposure. These controls are built into processes and, where possible, are autonomous, with proactive alerting. 10. Transparency & responsibility: Every organisation has its own journey, but the most effective teams have a long-term plan for transparent and responsible tax behaviour. They know the regulatory landscape is evolving and value responsible tax practices. They’re early adopters of cooperative compliance regimes, at their own pace. 11. Tax nerds 🤓: All team members are passionate about tax. Some may not have a tax background but fell in love along the way. They understand tax's pivotal role in society and, despite the complexity, love crunching the regulations. Anything I missed? P.S. if you want to share this visual with your team in high quality - DM me and I'll send it over.

𝐂𝐚𝐬𝐞 𝐒𝐭𝐮𝐝𝐲: 𝐂𝐨𝐨𝐫𝐝𝐢𝐧𝐚𝐭𝐢𝐧𝐠 𝐚𝐧 $18𝐌 𝐄𝐬𝐭𝐚𝐭𝐞 𝐅𝐫𝐞𝐞𝐳𝐞 𝐰𝐢𝐭𝐡 𝐚 𝐖𝐚𝐬𝐭𝐢𝐧𝐠 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐚𝐧𝐝 𝐋𝐢𝐟𝐞 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞👇🏽 We recently worked with a client in their early 60s who had just completed an estate freeze - the result: they held $18 million in preferred shares in their holding company. The freeze was a crucial part of their estate planning. However, without further planning, the frozen value would trigger a significant tax liability at death, and the preferred shares would pass to the estate - with minimal tax sheltering. That’s where our team stepped in - collaborating with the client’s accountant to design a post-freeze strategy that aligned with the client’s long-term needs. Our Approach ✅ 1. Wasting Freeze Strategy We began by creating a comprehensive retirement income plan. Using actual spending data, portfolio projections, and corporate cash flow, we gave the accountant precise withdrawal targets to implement a wasting freeze. This allowed the client to slowly redeem their preferred shares during their lifetime, reducing: • Future tax liabilities • Probate exposure • Complexity for the estate This also ensured that corporate distributions could be managed tax efficiently, aligned with the client’s marginal tax brackets. ✅ 2. Life Insurance to Cover Remaining Tax Even with an efficient wasting strategy, a large portion of the preferred shares would remain at death, resulting in a deemed disposition under ITA 70(5). We modeled the expected tax liability on death and helped the client implement a corporate-owned permanent life insurance policy to: • Fund the tax bill using CDA credits • Preserve the operating capital and legacy for heirs • Avoid forced liquidation of other assets Why It Worked ✔️ The retirement plan grounded the strategy in real data, not assumptions ✔️ The wasting freeze was structured collaboratively with the tax team ✔️ The life insurance policy ensured liquidity without disruption Final Thought An estate freeze is a great starting point - but not the finish line. Without a coordinated plan, it can leave the estate vulnerable to liquidity issues and unnecessary tax. 📢 When accountants, insurance advisors, and financial planners work together it leads to better outcomes for our clients. #LifeInsurance #TaxPlanning #BusinessSuccession #WealthPreservation #CDA #Collaboration #CorporatePlanning #EstateLiquidity #PrivateCorporations #cpa #cpacanada #cpaontario #cpabc #cpaalberta

𝗧𝗵𝗲 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗥𝗼𝗹𝗲 𝗼𝗳 𝗜𝗻-𝗛𝗼𝘂𝘀𝗲 𝗧𝗮𝘅 𝗔𝗱𝘃𝗶𝘀𝗼𝗿𝘀 𝗶𝗻 𝗦𝗮𝘂𝗱𝗶 𝗔𝗿𝗮𝗯𝗶𝗮 In Saudi Arabia’s rapidly evolving tax landscape, the role of in-house tax advisors has become more critical than ever. These professionals are not merely hired to save on advisory fees; a common misconception; but to support the business strategically from within. They serve as trusted internal partners who ensure tax efficiency, manage risk, and align tax planning with business goals. A key part of their effectiveness lies in their ability to collaborate closely with external tax advisors. 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝗖𝗼𝗺𝗽𝗹𝗲𝘅𝗶𝘁𝘆 𝘄𝗶𝘁𝗵 𝗖𝗼𝗼𝗿𝗱𝗶𝗻𝗮𝘁𝗶𝗼𝗻 KSA’s dual system of corporate income tax and zakat creates a unique environment. Saudi or GCC-owned entities are subject to zakat at 2.5%, while foreign-owned entities face corporate income tax at 20%. Add to this a 15% VAT regime, withholding tax (5–20%) on cross-border payments, detailed transfer pricing rules, and a growing emphasis on economic substance and permanent establishment risk and the need for robust tax planning becomes clear. In this context, in-house tax teams bring deep knowledge of the business, its operations, and its strategic direction. External advisors offer technical depth, cross-border experience, and insight into ZATCA’s latest practices. When both sides collaborate effectively, the result is practical, well-rounded advice that drives real value. 𝗪𝗵𝗲𝗿𝗲 𝗖𝗼𝗹𝗹𝗮𝗯𝗼𝗿𝗮𝘁𝗶𝗼𝗻 𝗗𝗲𝗹𝗶𝘃𝗲𝗿𝘀 𝗩𝗮𝗹𝘂𝗲 Some of the most impactful outcomes of in-house and external tax advisor collaboration in the KSA include: ✅ Zakat base optimization – Structuring equity, financing, and asset positions to minimize zakat exposure while remaining compliant. ✅ Cross-border structuring – Ensuring tax-efficient flows for outbound and inbound investments, while managing withholding tax and treaty implications. ✅ Audit readiness – Preparing robust documentation, responding to ZATCA inquiries, and managing assessments or disputes efficiently. ✅ Contractual advice – Structuring tax clauses in contracts to ensure proper WHT treatment and avoid financial leakage. ✅ Compliance management – Aligning with ZATCA filing requirements across zakat, VAT, CbCR, and transfer pricing documentation. 𝗘𝗻𝗮𝗯𝗹𝗶𝗻𝗴 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗢𝘂𝘁𝗰𝗼𝗺𝗲𝘀 Today, tax is no longer just a cost; it’s a governance issue. Boards and executives expect tax teams to support IPO readiness, digital transformation, ESG alignment, and investment decisions. In-house advisors who work hand-in-hand with trusted external advisors are best positioned to deliver forward-looking, risk-aware, and value-driven outcomes. 𝗙𝗶𝗻𝗮𝗹 𝗧𝗵𝗼𝘂𝗴𝗵𝘁 In KSA, the tax and zakat landscape is only getting more sophisticated. Strong collaboration between in-house and external tax advisors is no longer optional; it’s a competitive advantage. #saudiarabia #vat #tax #zatca #uae #wht #zakat