Taxation in many countries is seeing an overhaul, changing drastically at a global level on account of the tax stance taken by different countries. Hence the tax regimes are getting very rigid across geographies -- especially in India, certain parts of Europe and China, Swetang Vin, regional CFO at the US-based semiconductor company AMD Inc, says in an interview. Vin also shares various facets of his role. Edited excerpts:
What are the pros and cons of being a regional CFO? How are they different from being a country or a global CFO?
The role of a regional CFO is a unique and exciting profile. Most multinational organizations follow a functional model within the finance team. They have corporate accounting, treasury, sales & marketing partnering, tax, and more. As a regional CFO, I hold the horizontal thread of all these functions in all AMD regions outside the Americas. Unlike a country CFO, I lead the finance function for a larger geography. The scope allows me to have a broader perspective of the finance landscape and leverage best practices and talent from these regions.
To effectively play this role, you need a matrixed working style. The extensive geographic reach means, you have to consult and partner with many functional leaders to take a major decision. Finance and related regulations are very different in each country. You must have a very strong understanding of regional finance regulations and constantly keep yourself abreast with changing norms.
Have you ever gone outside your role of CFO, if so how?
Gone are the days where CFOs were only involved in compliance and accounting related work. Today, the role of a CFO is to support the business. We counsel on how to grow the business and how the organization structure should be optimized for strong performance. To ensure sustained growth, it is important to look at other aspects like how to look at the cost structure, how to leverage the right product portfolio. At AMD, I work closely with the sales team to ensure we optimize our margins and revenue to get a higher contribution margin. On the engineering side, I work closely with our teams to look at how we can innovative and lower the development cost to eventually improve the bottom-line.
Could you please share the top milestones you have set for yourself in this company for the next 18-24 months?
One of my focus areas is to gear up my team to work in tandem with the new scale of priorities and objectives set forth by the company. Another priority is to develop the team and train the next set of leaders who can take this organization further.
Externally, if you look at the geopolitical scenario, we need to ensure that we de-risk a lot of tax and other costing related elements. Tax regimes are getting very rigid across geographies, especially in India, certain parts of Europe and China. It is important that we understand the emerging trends and plan to be compliant to mitigate potential risks.
How has the tax compliance changed over the last five years? Is it now taking more of your time than previously?
Taxation in many countries is seeing an overhaul. It is changing drastically at a global level because of the tax stance taken by different countries. Tax authorities are becoming aggressive and the geopolitical scenarios, like the US-China trade dispute etc, are impacting taxation in regions. My team works closely with local tax authorities in each country to ensure we keep abreast of the changes and stay compliant whether it is in a two-employee base like Indonesia or 2000+ employee base region like China.
For India, with the introduction of GST, in what ways has the service tax regime got better and in what different ways has it become worse?
GST certainly did away with the age-old multilayer taxation system in India. There is no doubt that it was a bold and strategic move to simplify the law and expand the taxpayer base. It’s been over a year and the law seems to have achieved its basic objective.
Having said that, compliance remains a concern due to technical glitches in the GST network. We have observed that notices have been issued to registrations which got cancelled due to technical issues. Further, notices rolled out seeking reconciliation in the credit ledger require investing additional time and resources to provide explanation. This causes inconvenience to the tax payers.
The refund provisions are clear with respect to the credits pertaining to inputs and input services. However, the exporters of goods and services seem to have hit a roadblock on claiming refunds with respect to the credits associated with capital goods. This ultimately increases the cost or rendering services and makes us less competitive in the international market.
Going forward, a quick and permanent fix to the technical glitch is the call of the day. This will help save the resources needed to configure the accounting systems time and again. Inconvenience to the tax payers in the name of compliance and penal provisions should be avoided. The government should also provide better clarity on claiming refunds on capital goods.
What are the pros and cons of being a regional CFO? How are they different from being a country or a global CFO?
The role of a regional CFO is a unique and exciting profile. Most multinational organizations follow a functional model within the finance team. They have corporate accounting, treasury, sales & marketing partnering, tax, and more. As a regional CFO, I hold the horizontal thread of all these functions in all AMD regions outside the Americas. Unlike a country CFO, I lead the finance function for a larger geography. The scope allows me to have a broader perspective of the finance landscape and leverage best practices and talent from these regions.
To effectively play this role, you need a matrixed working style. The extensive geographic reach means, you have to consult and partner with many functional leaders to take a major decision. Finance and related regulations are very different in each country. You must have a very strong understanding of regional finance regulations and constantly keep yourself abreast with changing norms.
Have you ever gone outside your role of CFO, if so how?
Gone are the days where CFOs were only involved in compliance and accounting related work. Today, the role of a CFO is to support the business. We counsel on how to grow the business and how the organization structure should be optimized for strong performance. To ensure sustained growth, it is important to look at other aspects like how to look at the cost structure, how to leverage the right product portfolio. At AMD, I work closely with the sales team to ensure we optimize our margins and revenue to get a higher contribution margin. On the engineering side, I work closely with our teams to look at how we can innovative and lower the development cost to eventually improve the bottom-line.
Could you please share the top milestones you have set for yourself in this company for the next 18-24 months?
One of my focus areas is to gear up my team to work in tandem with the new scale of priorities and objectives set forth by the company. Another priority is to develop the team and train the next set of leaders who can take this organization further.
Externally, if you look at the geopolitical scenario, we need to ensure that we de-risk a lot of tax and other costing related elements. Tax regimes are getting very rigid across geographies, especially in India, certain parts of Europe and China. It is important that we understand the emerging trends and plan to be compliant to mitigate potential risks.
How has the tax compliance changed over the last five years? Is it now taking more of your time than previously?
Taxation in many countries is seeing an overhaul. It is changing drastically at a global level because of the tax stance taken by different countries. Tax authorities are becoming aggressive and the geopolitical scenarios, like the US-China trade dispute etc, are impacting taxation in regions. My team works closely with local tax authorities in each country to ensure we keep abreast of the changes and stay compliant whether it is in a two-employee base like Indonesia or 2000+ employee base region like China.
For India, with the introduction of GST, in what ways has the service tax regime got better and in what different ways has it become worse?
GST certainly did away with the age-old multilayer taxation system in India. There is no doubt that it was a bold and strategic move to simplify the law and expand the taxpayer base. It’s been over a year and the law seems to have achieved its basic objective.
Having said that, compliance remains a concern due to technical glitches in the GST network. We have observed that notices have been issued to registrations which got cancelled due to technical issues. Further, notices rolled out seeking reconciliation in the credit ledger require investing additional time and resources to provide explanation. This causes inconvenience to the tax payers.
The refund provisions are clear with respect to the credits pertaining to inputs and input services. However, the exporters of goods and services seem to have hit a roadblock on claiming refunds with respect to the credits associated with capital goods. This ultimately increases the cost or rendering services and makes us less competitive in the international market.
Going forward, a quick and permanent fix to the technical glitch is the call of the day. This will help save the resources needed to configure the accounting systems time and again. Inconvenience to the tax payers in the name of compliance and penal provisions should be avoided. The government should also provide better clarity on claiming refunds on capital goods.