The Tax Expat: A global journey of indirect tax with Daniel Coene
For this week’s edition of The Tax Expat, we welcome Daniel Coene, an Indirect Tax Manager based in Canada. Daniel is certainly no stranger to the concepts of expatriating as he presents an interesting story of how niches within the tax world can open doors, in this case, VAT and IPT (insurance premium tax).
Greetings Daniel! We appreciate you contributing to this week's Tax Expat! Daniel has a unique background, having lived in Mexico and Belgium, with his current residence in Canada. The indirect tax profession really can take you anywhere! So Daniel, please can you introduce yourself to the readers who aren’t acquainted with yourself?
Hi, I’m an Indirect Tax Manager at IMAX Corporation. I started my career as a tax consultant for IPT and VAT. Afterwards, I decided to move to an in-house VAT role to better understand the process of how data is gathered and what happens behind the scenes.
After living 9 years in Belgium I decided to pursue my MBA in Canada and spend some time working as an internal auditor for Scotiabank before returning to indirect taxes, which is my passion.
I’ll have to show my ignorance here, but my only knowledge of Mexico City is that it’s over 2000 meters above sea level! Could you enlighten me on what life is like in the Mexican capital?
It’s very exciting, there’s always something to do. Mexico is such a beautiful place, filled with history and culture. Actually, many people don’t know this, but Mexico City is the city with the most museums in the world.
People are also very friendly and the food is just off the charts, not only for Mexican food, but you’ll find sushi shops, Argentinian steakhouses, Lebanese restaurants… there’s something for everyone.
Unfortunately, security has always been an issue and has gotten worse over the years. However, nothing has ever happened to me, and I tend to go back once every year to visit family and friends. I always recommend to friends that I’ve made in Europe and Canada to go, and the ones that have visited this city have fallen in love with it.
I can see that your indirect tax career didn’t kick off until a relocation to Brussels. Why Belgium and why indirect tax?
Well, I was born in Belgium but my family moved to Mexico when I was very young, so I was practically raised in Mexico. I decided to move back to Belgium to do my bachelor’s degree and I stayed there for a couple of years to gain some professional experience.
Ending up in indirect tax was just a coincidence, I guess. In 2010, in my last year of college, Deloitte was recruiting for indirect tax consultants at my school. I’d never paid much attention to tax roles before, but I found the position challenging and I liked the fact that the VAT environment was evolving rapidly during that time. Since then, I’ve loved working in indirect taxes and have enjoyed the ride.
I don’t think many business people give indirect taxes the importance it deserves. Many tax professionals are still too focused on corporate taxes, but if you see the trend in the last decade, corporate tax rates have been decreasing while indirect taxes have increased.
Many global companies have their profits held overseas as they try to pay the lowest income tax as possible. However, just look at the US, countries are lowering corporate tax rates to attract foreign investment and keep profits in the country for reinvestment. Nowadays, several governments rely more on indirect taxes than direct taxes for their budget.
In my opinion, going forward, this trend will continue. Corporate rates will keep going down and more emphasis will be put on indirect taxes since Governments have more visibility on transactional data and it’s easier to track and monitor.
I noticed you’ve had experience in the IPT field as well. A niche skill to possess! How did you find juggling the intricacies of pan-European VAT & IPT?
IPT isn’t that different from VAT. Insurance premiums are exempt from VAT, so IPT is like the replacement of VAT for the insurance industry. The biggest hurdle I found while working at IPT was that this tax isn’t harmonized across the EU, unlike VAT. So for consultancy work, this made it more difficult, as you have to go to each local legislation to find the rules in each country.
Quite the change in climate & culture when comparing Mexico to Belgium I can only imagine. How did you adapt to your new surroundings?
It wasn’t a big shock, as I spent several summers in Belgium when I was growing up since my father is originally from there. However, it’s very different to go on vacation than to live there on your own. I struggled at the beginning as I had to learn Dutch first and people were closer minded than what I was used to. However, over time you meet people who’ve had the same experiences and you help each other out.
It also helped to join a Mexican association with people that spoke the same language, had the same values and views that I do, plus it allowed me to celebrate Mexican holidays and, in a way, stay closer to my roots.
I can see that after some time working in the Oil & Gas sector, you made the move over to Canada. What prompted such a step, and was the initial move away from indirect tax intentional?
The move to Canada was to pursue my MBA and be closer to my family and friends that were living in Mexico. However, the move away from indirect tax was not intentional. After finishing my MBA, I had several interviews for indirect tax positions. I always received the same feedback though: they liked my profile but they needed someone who also had Canadian tax experience. That’s how I ended up at Scotiabank for 2 years.
However, at the beginning of 2018, IMAX contacted me, as they needed someone with extensive VAT experience. IMAX had just sold their latest IP to their subsidiary in Ireland and many of their transactions were happening now through this subsidiary.
I was thrilled to go back to indirect tax and, as they say, the rest is history.
I’ve only ever heard good things about working at IMAX, but how have you embraced this new sector coming from FS & Insurance, to oil & gas, to where you are now?
IMAX is a very interesting place to work. Many people actually don’t understand what we do. Many people think IMAX is just about a bigger screen size. However, our business model is much more complicated than that and our goal is to deliver an immersive experience to moviegoers.
IMAX is now present in more than 80 countries. Just to give you an idea, IMAX has a presence in more countries than Starbucks.
What sets IMAX apart from other organizations, is that IMAX is managed more as a start-up, even though the company has been in business for more than 50 years. This was very challenging for me at the beginning, as I was given full autonomy with respect to indirect taxes. The European VAT and other reporting requirements were still being done manually, so my first goal was to streamline the processes and automate as much as possible. After working closely with IT, we were able to calculate taxes automatically within our ERP system and get 1099 reports for all of our US vendors.
You’ve spent a substantial amount of time in each country we’ve talked about, but are there any ways of life that you find yourself particularly missing from them?
There are good and bad things in every country, you just can’t have it all. In Canada, people are very friendly and I like the multiculturalism and open-minded personality of Canadians, but I do miss the work-life balance you get in Europe, for example. From Mexico, I miss my family and friends plus the fact that you have amazing weather all year round and the beaches are breathtaking, but then you have insecurity and corruption which you don’t have elsewhere (or you have in a lesser extent in Canada and Europe).
So, as I said before there are good and bad things in every country, you just have to adapt and enjoy it as each country has a lot to offer.
How would you rate your relocation experience overall? If you could turn back time - would you have made the same move?
Yes, I don’t have any regrets and I wouldn’t change anything. In Mexico, family and friends are very important, I have very fond memories of my childhood and my teenage years, so I cherish those years. In Belgium, I struggled at the beginning, but that helped make me stronger and made me who I am today, plus some of my closest friends are from there. In Canada, I’ve met people from all over the world and my first daughter was born here, so Canada has witnessed the growth of my family, which is my biggest blessing.
What advice can you share for other tax professionals who are considering a relocation abroad for their career?
Seek help! This is the most important thing. There are many people who have gone through what you’re going through and getting help from people that have already experienced it will save you time and money. Help can come in different ways, they can give you advice on little things such as which telecommunication company has better connection and is less expensive, to being there for you for moral support.
Moving to a country where you don’t have family can be difficult, but you’ll always find people who are willing to help and, before you know it, your friends become your family and will always be there for you.
It’s very easy to highlight the benefits of relocating for work, to which there are many. However, it’s also about making sure you’re in an environment that’s accommodating and right for you. Get this combination and you’ll certainly excel. Thanks very much Daniel, I found this an interesting experience, of which I’m positive our readers will agree! Until next time.
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