Bloomberg Tax recently chatted with Sharon Heck, chief tax officer and treasurer at Intel Corp., about how the giant multinational chipmaker’s tax team is adjusting to the coronavirus pandemic.
Heck joined Intel in 2018 as vice president of finance and director of global tax and was promoted to her current rule in October 2019. Despite the full to-do list of domestic and international tax authorities, Heck said getting through to regulators and lawmakers has been easier.
Bloomberg Tax: What challenges have you and your team faced in the working-from-home environment?
Heck: One of the things I’ve talked about in the past when I was a partner with PwC, and I certainly thought about as the new head of tax at Intel—It’s been two years now: “What is the brand of the tax function within the broader corporation?” And I certainly think tax is cool. And I know all your readers will as well. But that isn’t always shared more broadly. And and so one of the things we’ve been thinking a lot about before Covid-19 is how do we become more approachable? There’s this whole complex language of tax, and as tax has gotten more and more complicated, it’s important for our finance colleagues to really understand how we think through tax.
And so we’ve been trying to do more outreach and networking and that certainly has gotten harder with with Covid-19. Meetings are a little more formal and informal at the same time as you do them on Skype or Teams or other platforms. You don’t have those little side conversations that may happen as you whisper to somebody, or help pause the conversation because you see a frown and somebody isn’t following along. And so as tax experts we’re missing on some of the non-verbal cues that helped make sure our message is getting across, and I worry that we don’t get the same number of questions that we that we might in person. And so that has been a shift, as we think through how do we continue to elevate that brand of being approachable, taking the complex and simplifying it and continue to educate people.
We started a little internal podcast around taxes, and we pick up sort of current topics—whether it’s the taxation of cryptocurrency or the news around the disclosure of Trump’s returns—and try to just make tax bite-sized and a little bit approachable for the broader finance team.
Sharon Heck
Courtesy of Intel
Bloomberg Tax: A podcast? Is that available outside Intel?
Heck: It is internal. We don’t want to step on your toes. You do a great job in tax media, educating the world. We’re just trying to do a little internal interest and help get our finance colleagues wise about tax and and really our internal messages to be a well-rounded finance professional. You’ve got to have some tax knowledge in your toolkit. And so we’re trying to help help others think about tax in a broader way.
Bloomberg Tax: What creative solutions have you come up with to overcome some of the obstacles to communication?
Heck: We’ve tried those virtual teas or coffee hours—we’ve done some virtual puzzles and things like that to get some of that community. What I’m finding is those initially really took off and people were excited to connect. Now that novelty is somewhat worn off, and I think we’ve got to find ways to schedule in time to build those connections, a little bit, like what would happen before and after? So what we’re trying to do instead of hour-long meetings is to do 45-minute content meetings, and give yourself a little bit of wiggle room to talk ahead of the meeting or after the meeting about how things are going or whatever might be on people’s minds to just keep that relationship connected.
But like everyone, we’re trying to figure out how do you bridge that in some ways, it’s made it a more equal playing field where we’ve been able to connect with our global colleagues on more equal footing, everybody’s on the phone. And it’s not as if you’ve got 20 people in a conference room and the two people on the phone feel excluded. I really love the inclusion aspect of it, because it’s caused us to rethink how we all communicate virtually and I think has really helped us build some of those muscles. We’re now really rethinking how do we continue to invest in that relationship.
Bloomberg Tax: We’re very much in the middle of this crisis, but many companies are looking to the future and reopening. What is your approach to the new tax landscape?
Heck: It is really thinking through ‘What does the future of our work look like as as we think through different collaboration tools, as governments are going to have different policies?’ We’ve gone through tax reform, however, as you know, there’s a lot of government spending that’s going on out there around the globe and how does that change the landscape of tax? So really, doing some of that brainstorming around ‘How the world of tax shifted and how has our view of risk, view of opportunities changed from before this crisis to after?’ And making sure that that’s updated in a deeper way than just a crisis-management kind of way. So I’m looking forward to doing that brainstorming, that futuristic view of how the landscape is likely to change and updating some of those “crystal balls,” as I like to call them, that are always hard to predict and tax.
Bloomberg Tax: Has communication with the IRS and other tax authorities been more difficult? Have you gotten the clarity you need?
Heck: At first everything was paused a little bit as I found that policymakers had to figure out what they were or weren’t going to do remotely. But more recently, everybody seems to have gotten comfortable doing things remotely. And actually, as a company on the West Coast, it’s made it easier for me to participate in more OECD forums and, and congressional calls and other things that I tended to only do when I could make a trip. And so in some ways, it’s actually made it a lot easier to do those, because you don’t have the travel time, you don’t have to wait until you can connect a bunch of those meetings.
I would go to Washington, D.C. for a couple of days at a time and do all these meetings back-to-back. Now, it’s just a matter of scheduling them when it fits in. It’s made it easier from that standpoint, which I hadn’t really thought about or even imagined meeting with congressional leaders or policy leaders via Zoom or other types of forums.
The more complex thing, as you know, is just like we were saying with all those non-verbals, you can pick up some of those on the video but you definitely miss that opportunity to catch a flashed smile or see that frown that you may not see because you’re looking at the speaker and not the rest of the room.
I’m on an R&D coalition, I’m the chair of a group that is talking to a lot of policymakers about the need to have R&D deductible. And starting in 2022, R&D will have to be amortized. And that’s a unique policy around the globe, and I feel pretty strongly that the U.S. should not go down that path. And so not being able to see the broader reaction of: ‘Is the room tracking? Do they even understand what I’m saying when I say the word amortization?’ It has been harder to do virtually, for sure.
Bloomberg Tax: We are expecting a lot of guidance and rules from the IRS this year. Which are you most anticipating and why?
Heck: OIRA has the foreign derived intangible income regulations. And so we’re eagerly awaiting to see what those look like. Those are critical for us as a U.S. manufacturer. We have plants in Oregon, Arizona, New Mexico; over half of our 100,000 employees are U.S.-based; Intel owns its intellectual property in the U.S. So those regulations are really important to us as a U.S. manufacturer, and we’re eagerly awaiting their release. I know they’re close, I was happy to see they’re still moving. I expected them to be delayed further.
Bloomberg Tax: On the international front, the U.S.'s participation in the OECD digital tax talks seems to be at risk. Is that concerning to Intel as a major multinational?
Heck: We’ve looked at the Treasury Secretary Steve Mnuchin’s letter and there definitely seems to be a pause on Pillar I with Covid-19 and everything else going on. It does seem like the U.S. government is thinking more progress may get made on Pillar II, the minimum tax, and conversations might continue. And we’re we’re very focused on that.
We support, of course, a stable tax system that supports innovation in manufacturing, and, really, the U.S. Treasury being part of broader international discussions to make sure it reduces complexity.
As we think through Pillar II and the minimum tax proposals that the OECD is currently discussing, in our minds, we feel that any global minimum tax should be like GILTI, the U.S. system, in that it’s a worldwide basis that that minimum tax is really applied on. If that OECD Pillar II proposal is done more on a country-by-country level, we’re concerned that compliance burden there will be significant. And we’re hopeful that the U.S. government, the OECD, and all involved really think about the compliance challenges. I know in the mind sometimes that it’s just math, but the burden that that math puts on business can be great, and we’re really hopeful that we get to a worldwide basis.
Bloomberg Tax: Have you developed any hobbies in quarantine?
Heck: Getting a good cup of coffee has been exceedingly difficult. I can’t just walk across the street and go to my favorite coffee house. I’ve tried different things as far as making my own cold brew, and other other sort of approaches to a good cup of coffee. I don’t think I’ve quite gotten that nailed.
I’ve had the opportunity to do more reading. I try to actually read close to 100 books a year and I find that I’m actually on track for that goal. And really having my commute cut out has helped me continue to stay on track with that.
Bloomberg Tax: What’s been your favorite book in 2020? What do you recommend?
I tend to read a lot of murder mysteries. You’ve got to also have fun, some fun reading along with some serious reading. But “The Ride of a Lifetime” by Bob Iger, the CEO of Disney: Fantastic book. I was really impressed with the way he outlines his journey and really shared a lot of great leadership lessons that I took away as just being fantastic.
My last, absolute favorite book of the year, and I think this will be my favorite book for the whole year is “The Moment of Lift” by Melinda Gates. She really talks about empowering women to change the world. I’m still sort of processing a lot of the key messages from that book, but it was just fantastic.
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Corporate Tax Chat With Sharon Heck of Intel Corp. - Bloomberg Tax
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