Global tax advisory services revenue grows to $20B, up $5B in 3 years
Tax advisory revenue at professional services firms expanded 8.6 percent to $20.3 billion in 2017, and grew by around $5 billion in just the three years from 2014 to 2017, according to a new report.
The report, from Source Global Research, found that the main tax advisory services around the world are business tax management (estimated to total $9.27 billion globally), transfer pricing (totaling $5.18 billion), and international tax (amounting to $1.58 billion). The financial services sector is the largest sector asking for global tax work ($6.64 billion), making up almost a third of the world’s tax advisory market in 2017. The total market is estimated to grow to $24 billion this year and $27 billion next year.
The report found that the firms controlling the biggest share of the global tax advisory market were the Big Four, with an 87 percent market share. Ernst & Young led the pack with a 35 percent share of global revenues.
“With decisions about tax increasingly becoming enmeshed with wider business decisions, firms need to be able to provide multidisciplinary offerings that integrate tax decisions with other key areas such as risk and audit—and even business consulting services—putting the Big Four in a strong position with clients,” said Fiona Czerniawska, a director at Source Global Research, in a statement. “Deciding where to manufacture, hold intellectual property rights, or locate head office functions are all increasingly becoming as much of a tax decision as a business one. This illustrates why Brexit will lead to an increase in tax advisory work.”
The London-based research firm saw the U.K. tax advisory market expanding at a slightly slower rate of 7 percent to $2.2 billion in 2017, but it predicted that once the details of the U.K.’s exit from the European Union becomes clearer this year, growth in the tax advisory market is estimated to nearly double to 13 percent from Brexit-related work. The report forecasts that the U.K. share of tax advisory revenue will grow more quickly than any other European country next year.