Why did you choose to pursue a career in tax? Was there an ‘aha’ moment? If so, please describe.
As a Gemini majored in accounting, among all the courses I took, I found tax to be so unique and mercurial. On the one hand, it is highly regulated by various tax laws and legislations, but still offers tremendous room for manoeuvre depending on your imagination and interpretation.
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?
It was a project back in 1990’s in which two leading oil & gas players contemplated establishing a mega-sized joint venture in China with a state-owned enterprise. I was engaged to facilitate the negotiation with a view to securing the appropriate tax treatments. As a pioneer project at that time, there weren’t specific tax rules or regulations. Therefore, interpretation of the-then prevailing rules and regulations and more importantly, negotiation with the competent tax authorities and the local government became critical. Another challenge came from the Chinese partner who lacked the appetite to tax incentives. Therefore, I needed to get through at least three rounds of "communication" including the JV partners and the tax authorities. Sometimes, I also needed to represent the JV partners to speak with the mayor. The whole negotiation process took around 10 years and my personal takeaway is to be a competent tax advisor, you need to be technically sound and be able to interpret the existing rules and regulations. You also need to possess good interpersonal skills to not only bring enough technical experience to the meeting room but also communicate well at different levels. Lastly, you need to adopt an open attitude and balance the interest of different stakeholders.
What do you consider to be the greatest achievements of your career to date?
As the first mover of Deloitte Tax to volunteer myself to work fulltime in Beijing back in 1994, I had the privilege to build a tax practice from scratch. In addition, through our "WorldClass" project, Deloitte has been working to provide access to education and skill-building in underserved communities around the world. I was fortunate enough to be charged with the establishment of the Deloitte Foundation in 2015, which is the flagship of Deloitte China to centralize all the resources for philanthropic supports in China. As a professional, I felt blessed to have the opportunity to develop and build my professional career with the world leading professional firm and yet, have the right platform to contribute to the wellbeing of our society, and offer support and aids to the underserved around us!
Tax work in the pandemic era
What kind of challenges did you face adapting to the workplace amid the pandemic?
With the pandemic, I think the biggest challenge is to work from home. Despite the advanced development in technologies and communication means in the past few years, people still pretty much got used to physical office environment and face to face communication mode. All of a sudden, we needed to stay home and could only make use of telecom facilities to carry out our work. It really caused some delays but thanks to the advanced technologies and prompt contingency plans of our firm, we managed to change gear and quickly adapted to the work from home mode. Even today, although the pandemic in China is pretty much under control, we still adopt a certain level of flexibility at work in order to address any ad hoc situations arising because of the current situation.
Are there any initiatives that you have observed which you feel may help your clients deal with the repercussions of the Covid-19 pandemic?
Generally speaking, repercussions of the pandemic are devastating. Fortunately, we are starting to see businesses in China recover from the pandemic and among the various initiatives, I think strategic planning and execution of business or operation digitization are the most popular initiatives these days. The pandemic has bluntly halted all physical activities overnight, which prompted businesses to expedite the move of their business activities online as far as possible.
What is the most significant change to your region/jurisdiction’s tax legislation or regulations in the past 12 months?
The past 12 months have been the turn of the 5-year plan of China where the 13th 5-year plan was successfully completed, and the 14th 5-year plan was formally kicked off. From a tax legislation standpoint, China continues its legislative journey of tax laws. Up to 30 June 2021, China has legislated 12 out of 18 types of tax rules in order to pave way for its "rule by law" target. In fact, the Chinese government has spared no effort to further improve its tax administrative systems (including digitization of special VAT invoices) and emphasize the service mindset among its tax officials in order to improve and promote the business environment of China.
What was one of the most interesting deals you worked on in the past year and why?
It was a project referred to China by an overseas member firm, in which the overseas tax authority challenged the tax residence of an individual who had strong ties with China. This kind of situation has become common in recent years as many Chinese nationals migrate to overseas but somehow still maintain economic or family ties with China. With the introduction of tax policies such as common reporting standards, taxpayers' information will become more transparent and be readily available so much so that foreign tax authorities can start to look into the business or trade activities conducted by immigrants and enquire if there are any under-reported tax liabilities.
What potential other legislative/regulatory changes are on the horizon that you think will have a big impact on your region/jurisdiction?
I anticipate the reform of the Tax Administrative Law and the legislation of VAT and Consumption Tax will be the key legislations on the horizon in China. These legislations will not only be the cornerstone of the legislative journey of China Tax Laws but also introduce some interesting new concepts to enhance the predictability of tax matters in China. They will also offer relief to taxpayers in the case of disputes with the tax authorities. Simply speaking, these changes will further improve the tax environment of China.
A 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?
Look before you leap! Indeed, the tax profession is not lucrative anymore, but professional services are currently undergoing tremendous changes under the impacts of Industry 4.0. Extensive professional knowledge may have a diminishing market value and young attorneys should be sensitive about the rapid changes in the profession and the business world to stay ahead of the curve. They should continue to learn fast and on a wide range of taxes and laws in order to keep up, if not sharpen their competitive edge as they are not only competing with their fellow colleagues but also the technologies and robots. Looking back at my 30+ years of career, I was fortunate to start in the 1980’s where the market pace was relatively slow and more importantly, I had relatives and friends who knew the professional services well enough and were kind to share their experience and wisdoms with me. However, for young attorneys these days, what is happening in the marketplace is unprecedented and therefore, it is advisable for them to be alert 24/7.
What does your firm do to nurture and promote talent? Do you think it compares well to others in your market in this area?
Deloitte China initiates leading market practices in talent, which has been highly recognized by "Top Employer China" consecutively for 15 years. We are committed to developing our people into leaders of the future and have launched "High Value, High Touch and High Tech" (3H) talent strategy for around 5 years which aims to develop their capabilities throughout their career. 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 change 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 people. Our continuous innovation and forward-thinking approach in digitalizing talent management is another key reason we have exceeded the rising 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.
If you could introduce one new policy in the legal profession what would it be?
This is a very difficult question, however a policy change targeted at creating greater incentives for the usage of alternative dispute resolution processes would be beneficial and enhance the efficiency of the legal system generally.
What does the tax function of the future look like?
The future tax function would likely be dynamic, fluid, and influential as companies accelerate their business model transformation. Technologies such as robotic process automation (RPA), natural language processing (NLP) and artificial intelligence (AI) give the tax function the ability to work with all the information available in massive data sets. Tax professionals will no longer be tied up with routine compliance and reporting service, but will understand the processes behind tax, be able to code, interpret data and make decisions. I believe the tax function of the future is empowered to deliver more agility and value to their organizations in the near future.
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