Compliance is the floor, not the ceiling. The tax functions creating meaningful enterprise value this year are not simply the most technically rigorous—they are the ones that engage earliest.
Over the past decade, most tax teams have earned a seat at the table through stronger governance, tighter controls and consistent compliance. That work was essential. But having a seat is not the same as using it.
A smaller group of tax functions has moved upstream into capital allocation, deal structuring and operational planning. They are shaping decisions and generating measurable financial outcomes. The majority remain downstream, validating decisions that were already made.
Getting compliance right earned tax a place in the room. It did not create influence over what happens there. That gap is still visible in three areas.
Consider a manufacturer evaluating a CAD 40 million equipment investment. Finance builds the model. Operations signs off. Tax is brought in after approval to confirm depreciation. The filing is clean. The return is acceptable. And between CAD 3 million and CAD 6 million in after-tax value is left on the table—not because incentives were unavailable but because tax entered too late.
By the time tax was consulted, asset classifications are fixed, commissioning timeline are locked and provincial program windows have closed. The incentives existed in both versions of the decision. Only the timing changed.
Recent changes in the Canadian tax landscape—accelerated depreciation, immediate expensing, clean technology incentives and layered provincial programs—have made the after-tax cost of capital something that can be actively shaped. None of that is accessible if tax enters after the structure is set. This is not a technical issue—it is a structural one.
The old model was linear: file, wait, respond to audit. That model no longer holds.
Jurisdictions now share data more frequently. Cross-border inconsistencies are identified through analytics before an audit even begins. And with Pillar Two, many organisations are discovering mid-implementation that the challenge is not tax—it is data. The rules require a level of consistency across entities, systems and finance teams that most organisations are not yet equipped to deliver.
Today’s exposure is often not a technically incorrect position. It is a technically correct filing that fails to tell a consistent story across jurisdictions and that inconsistency draws scrutiny.
The objective is no longer accuracy alone. It is coherence and defensibility, ensuring that what is reported reflects how the business actually operates, not a reconstruction of it.
Across R&D, clean technology and capital investment—areas where incentives are available—underclaiming remains common. Complexity explains some of it but timing explains most. Teams perform qualifying work but fail to capture evidence as they go. Tax is pulled in at year-end to reconstruct months later, producing a smaller, harder-to-defend claim—and the cycle repeats annually. When eligibility and documentation are built into project scoping, claims improve and capital decisions improve with them. The resulting claims are larger, more consistent and fully defensible.
The challenge is not more analysis. It is earlier involvement. In practice, that means showing up at three specific moments:
Trade volatility, tariff pressure and supply chain shifts are compressing decision timelines. Capital, structure and risk decisions now occur in parallel—and tax cuts across all three.
The gap between upstream and downstream tax functions will widen. Teams that shape decisions move faster and with less reactive cost. Teams that only validate will remain slower and more exposed.
Most tax functions have the compliance foundation. The question now is whether that foundation shapes decisions or merely documents them.
(An earlier version of this article appeared in The Tax Executive Brief.)
Harry Chana
BDO in Canada
Over the past decade, most tax teams have earned a seat at the table through stronger governance, tighter controls and consistent compliance. That work was essential. But having a seat is not the same as using it.
A smaller group of tax functions has moved upstream into capital allocation, deal structuring and operational planning. They are shaping decisions and generating measurable financial outcomes. The majority remain downstream, validating decisions that were already made.
Getting compliance right earned tax a place in the room. It did not create influence over what happens there. That gap is still visible in three areas.
Capital Decisions Are Still Being Made Without Tax
Consider a manufacturer evaluating a CAD 40 million equipment investment. Finance builds the model. Operations signs off. Tax is brought in after approval to confirm depreciation. The filing is clean. The return is acceptable. And between CAD 3 million and CAD 6 million in after-tax value is left on the table—not because incentives were unavailable but because tax entered too late.By the time tax was consulted, asset classifications are fixed, commissioning timeline are locked and provincial program windows have closed. The incentives existed in both versions of the decision. Only the timing changed.
Recent changes in the Canadian tax landscape—accelerated depreciation, immediate expensing, clean technology incentives and layered provincial programs—have made the after-tax cost of capital something that can be actively shaped. None of that is accessible if tax enters after the structure is set. This is not a technical issue—it is a structural one.
Compliance Risk Has Changed Shape
The old model was linear: file, wait, respond to audit. That model no longer holds.Jurisdictions now share data more frequently. Cross-border inconsistencies are identified through analytics before an audit even begins. And with Pillar Two, many organisations are discovering mid-implementation that the challenge is not tax—it is data. The rules require a level of consistency across entities, systems and finance teams that most organisations are not yet equipped to deliver.
Today’s exposure is often not a technically incorrect position. It is a technically correct filing that fails to tell a consistent story across jurisdictions and that inconsistency draws scrutiny.
The objective is no longer accuracy alone. It is coherence and defensibility, ensuring that what is reported reflects how the business actually operates, not a reconstruction of it.
Incentive Programs Are Being Underclaimed
Across R&D, clean technology and capital investment—areas where incentives are available—underclaiming remains common. Complexity explains some of it but timing explains most. Teams perform qualifying work but fail to capture evidence as they go. Tax is pulled in at year-end to reconstruct months later, producing a smaller, harder-to-defend claim—and the cycle repeats annually. When eligibility and documentation are built into project scoping, claims improve and capital decisions improve with them. The resulting claims are larger, more consistent and fully defensible.
What Should Change
The challenge is not more analysis. It is earlier involvement. In practice, that means showing up at three specific moments:
- When capital decisions are being evaluated, not after they are approved;
- When projects are scoped, not when claims are being prepared; and
- When data and reporting processes are designed, not when filings are being assembled.
What the Next 12 Months Will Clarify
Trade volatility, tariff pressure and supply chain shifts are compressing decision timelines. Capital, structure and risk decisions now occur in parallel—and tax cuts across all three.The gap between upstream and downstream tax functions will widen. Teams that shape decisions move faster and with less reactive cost. Teams that only validate will remain slower and more exposed.
Most tax functions have the compliance foundation. The question now is whether that foundation shapes decisions or merely documents them.
(An earlier version of this article appeared in The Tax Executive Brief.)
Harry Chana
BDO in Canada