2021 TECHNOLOGY CFO OUTLOOK:

INTERNATIONAL EDITION
MARCH 23, 2021

BDO USA, LLP, a Delaw are limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited
by guar antee, and forms part of the international BDO network of independent member firms.
 WITH YOU TODAY

AFTAB JAMIL DOUG HART TONY SPILLETT DAVID YASUKOCHI

Assurance Partner & Global Assurance Partner & U.S. Tax Partner & Head of Tech Tax Partner
Technology Industry Leader Technology Industry Leader and Media Industry BDO USA
BDO USA BDO USA BDO UK

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 TODAY’S DISCUSSION

What’s next for tech in critical areas of risk and opportunity:

ECONOMIC SUPPLY RISK/

GROWTH WORKFORCE
OUTLOOK CHAIN REGULATION

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 2021 TECHNOLOGY CFO OUTLOOK
 14th annual survey of 100 technology industry CFOs

 Conducted by an independent market research firm

DID YOU KNOW?

Average tenure of CFOs
surveyed is 5 years within their
current role

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 2021 TECHNOLOGY CFO OUTLOOK

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 TECHNOLOGY CFO OUTLOOK VS. MIDDLE MARKET CFO OUTLOOK

Ramping Up Remote Tech Lags on Real Estate Across Trade & Tariffs Top
Work Diversity & Inclusion the Board Policy Concerns

51% of tech CFOs plan to 35% of tech CFOs are 32% of both tech and
increase remote work prioritizing D&I, as middle market CFOs are The #1 policy concern for
options, as compared to compared to 42% of both groups of CFOs was
reevaluating their real
trade and tariffs
43% of middle market middle market CFOs estate footprints
CFOs

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ECONOMIC OUTLOOK
TECHNOLOGY INDUSTRY
 GLOBAL CRISIS BUT RECOVERY IN SIGHT
IMF World Economic Outlook growth forecasts (%)
14

-1

-6

-11
United Kingdom India Euro Area Japan United States China
2020 2021 2022

8 8 Source: IMF, CBI

 TECH SECTOR OUTLOOK BACK IN JANUARY – APRIL 2020

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 TECH’S COVID MOMENT

 Every industry and critical service relied on

technology, and it delivered.

 Overnight shifts to remote work, surges in

telemedicine and online learning drove demand.

 Crisis brings clarity: with many options for

growth ahead, 2021 is all about optimization.

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 TECHNOLOGY MARKET TRENDS

Stability or Access to Investor Regulatory

Surge of Capital Darling Scrutiny
Demand

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 OPTIMISM AHEAD

Tech companies powered resilience across every industry in 2020.

66% say they expect their business will be thriving one year from now.

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 POLL QUESTION #1

Q: Compared to 2020, what are your revenue expectations for 2021?

a) Increase significantly

b) Increase slightly

c) Remain the same

d) Decrease slightly

e) Decrease significantly

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FINANCIAL GROWTH
TECHNOLOGY INDUSTRY
 INNOVATING TO MEET CUSTOMERS’ NEXT NEEDS

COVID-19 fundamentally and

permanently shifted the
GEOGRAPHIC
marketplace. ANALYSIS

Tech companies swiftly

responded by accelerating
change and prioritizing
innovation to meet new Will reevaluate
demands - and will continue to real estate
do so in the coming year. footprint

. 32%

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 OPTIONS FOR REALISING GROWTH

RIGHT PARTNER
CFOs’ DEAL FLOW OUTLOOK

30% of tech CFOs plan to pursue PE investment in 2021

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 GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REBOUND

17 Source: Dealogic; Preqin; Bain & Co.

 TECH’S SHARE OF GLOBAL DEALS
35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

18 Source: Dealogic
 SPAC SURGE CONTINUES
 Like many industries, SPACs have
flocked to tech in 2020 and 2021

 Provides a public exit for technology

companies not meeting normal IPO
growth/size criteria

 Many SPAC candidates are not yet

SEC/public ready and need to make
significant progress in:

- Building investor story and metrics

- Ability to develop and meet forecasts

- Financial reporting, internal controls,

infrastructure and corporate governance

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 POLL QUESTION #2
Q. Which of the following will be your biggest business priority this year? (SELECT ONE)

a) Data privacy
b) Cutting costs
c) Managing through economic downturn
d) Recruiting/retaining top talent
e) Investing in technology or infrastructure
f) Supply chain optimization
g) Environmental social governance
h) Outsourcing roles or functions

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SUPPLY CHAIN
TECHNOLOGY INDUSTRY
 SECURING MORE VALUE IN SUPPLY CHAIN

Shutdowns, shortages and surges have put supply chain in focus.

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 THE SHIFT TO GLOBAL VALUE CHAIN
Global Value Chain is reimagining an organization’s global supply chain footprint, including
operational, human capital, tax, financial, and real estate elements in order to:

INCREASE PROFITS REDUCE RISK

DRIVE EFFICIENCY IMPROVE RELIABILITY

COMPLY WITH NEW LAWS AND

IMPROVE CUSTOMER SERVICE
REGULATIONS

STRATEGICALLY POSITION FOR

CAPTURE INCENTIVES
FUTURE GROWTH

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 TRADE CONCERNS SHIFT FROM SECURITY TO SALES

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TAX IMPLICATIONS & OUTLOOK
TECHNOLOGY INDUSTRY
 EVERY MOVE WILL HAVE A TAX IMPLICATION

Tech CFOs’ Top Tax Concerns

UNDERSTANDING YOUR TOTAL
TAX LIABILITY

11% UNDERSTANDING
TRANSFORMING THE TAX
YOUR TOTAL TAX FUNCTION
LIABILITY, 22%
15% NAVIGATING SHIFTING TRADE
AND TARIFF POLICIES

UNCERTAINTY AROUND
DIGITAL TAXATION
19%
16%
MANAGING ALL YOUR STATE
AND LOCAL OBLIGATIONS
17%
SCENARIO PLANNING FOR
POTENTIAL TAX REFORM

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 Biden Administration Proposed Tax Plan

Corporate Income Tax Rate Increase

 Increase the corporate income tax rate from 21% to 28%

Alternative Minimum Tax Based on Book Income

 Apply a minimum 15% tax rate on income reported on financial

statements (so-called “book income”) of corporations with at least
$100 million of book income

International
 Double the tax rate on global intangible low taxed income (“GILTI”)
from 10.5% to 21%, and eliminate the exemption for qualified business
asset investment (“QBAI”)

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 Biden Administration Proposed Tax Plan
Offshoring Policies - Manufacturing

“Made in America” Tax Credit

 Creates a “Made in America” tax credit to offset 10% of investments geared
toward creating jobs in the U.S., including the reopening, retooling,
revitalizing or modernizing recently closed down U.S. manufacturing
facilities, as well as costs related to bringing overseas jobs to the U.S. or
increasing manufacturing wages

New Surtax
 Introduces a surtax on certain goods produced overseas and consumed in
the U.S. This surtax would also apply to certain U.S.-targeted services
performed abroad. It would likely be implemented as an expansion of the
Subpart F regime and so would only apply to U.S.-parented multinationals

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 Federal Tax Landscape
Sunsetting of Several Favorable Provisions / Transition to Less Favorable Provisions:

 Five-Year NOL Carryback no longer available for tax years beginning in 2021

 Reversion to 30% of Adjusted Taxable Income (ATI) Limitation on Net Business Interest Expense in tax years
beginning in 2021 (from 50% for 2019 and 2020)
 ATI will include depreciation, amortization and depletion for tax years beginning in 2022

 Research & Experimentation Expenditures will be required to be amortized commencing in tax years
beginning in 2022

 Notwithstanding Biden Tax Proposal changes, GILTI tax rate scheduled to increase to 13.125% (from 10.5%)
for tax years beginning in 2026

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 POLL QUESTION #3

Q: What is your top tax concern for 2021?

a) Expected tax rate increases to pay for COVID-9

b) Automating internal tax processes to increase accuracy and reporting capability

c) Uncertainty around digital taxation

d) Total cost of complying with tax filing requirements globally

e) Understanding the impact of tax when expanding into new territories

f) Impact of Brexit on tax profile and tax compliance costs

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WORKFORCE OPTIMISATION
TECHNOLOGY INDUSTRY
 Tech will Lead the Way in the Future of Work

Many tech companies

say that improved
workforce culture and
unity was a silver lining
of 2020.

Now, maintaining
culture and innovation
in a more remote and
geographically dispersed
setting will be a top
challenge of 2021.

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 OFFICE SPACE LIKELY TO REDUCE

On average businesses
expect their office
space to reduce by

18%
compared to 2019
Q Compared to what you had in 2019, by what proportion do you think the size of your
total office space in the UK will have changed in the two to three years beyond 2021,
if at all?

Base: All businesses responding (573)

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Source: CBI 33
 HYBRID MODEL OF WORKING BEYOND 2021
In 2019… Beyond 2021…

Entirely or mostly in an office/

79% 28%
workplace away from their own home

Split evenly between an office/

8% 47%
other workplace and their own home

Working entirely from their own home/ 17%

13%
Working mostly from their own home

Other n/a 6%

Don’t Know 0.2%

THE BIG SHIFT:
1%

HR Reliance
Q Which of these best describes how the majority of your UK staff carried out their work in a typical week in 2019?

Q Which of these best describes how you think the majority of your UK staff will carry out their work in a typical week in the two to three years beyond 2021?

Base: All businesses responding (573)

34 Source: CBI
 PRIZING AND PRIORITISING DIVERSITY

While stakeholder pressure

is no doubt one of the
drivers, efforts to enhance
diversity and inclusion are a
business imperative.

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 DIVERSITY, EQUITY AND INCLUSION
Safety Now, Diversity Next

THE BIG SHIFT:

HR Reliance

36 Source: BDO Board Pulse Survey

 TECH’S TALENT STRATEGIES POINT TO OPTIMISATION OF RESOURCES

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 FUTURE OF WORK

What’s Next For Work Report What’s Next For Business – LinkedIn Newsletter

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 POLL QUESTION #4

Q: Do you think competition for talent will be higher, lower or about the same this year?

a) Higher

b) Lower

c) About the same

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RISK & REGULATIONS
TECHNOLOGY INDUSTRY
 TECH’S TOP POLICY CONCERNS BEFORE JANUARY 2021

5%
6% TRADE AND TARIFFS
23%
7% HEALTHCARE Heading into 2021, tech CFOs were
DATA PRIVACY mixed on top regulatory worries.
TAX REFORM
13%
INTERNATIONAL SECURITY Tariffs, trade and tax were
AND DIPLOMACY
IMMIGRATION commonly cited.
17%
CLIMATE CHANGE

13% SOCIAL JUSTICE

16%

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 WHAT’S NEXT

45% of tech CFOs say the industry needs more regulation. They may get what they ask for…

Content Data
Antitrust
Moderation Privacy

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 POLL QUESTION #5

Q: What government activity impacting the tech industry do you expect to be prioritized first?

a) Antitrust

b) Platform monitoring

c) Data privacy/cybersecurity

d) Worker’s rights

e) Immigration

f) Trade relations & tariffs

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QUESTIONS & ANSWERS
 ADDITIONAL INSIGHTS

2021 BDO Technology CFO Outlook Survey

 Full data report
 Key takeaways

See how Tech compares to other industries:

2021 BDO Middle Market CFO Outlook Survey

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 PRESENTER:
BIOGRAPHY:
Aftab Jamil Aftab Jamil has more than 30 years of experience in
public accounting. He has substantial experience in
serving publicly held and VC and PE backed medical
device, life sciences and technology companies. Aftab
AFTAB JAMIL
has served public and private companies ranging from
Assurance Partner & Global start-up, development stage enterprises to established
Technology Industry Leader multinational companies.
408-352-1999
Aftab has experience with SEC reporting, mergers and
ajamil@bdo.com acquisitions, international operations and strategic
partnerships. He has participated in the preparation of
numerous IPOs, SPACs and secondary public equity and
debt registration statement filings as well as on-going
Securities and Exchange Commission reporting.

Aftab has also spent substantial time assisting publicly

and privately held clients and their audit committees in
understanding, evaluating, and implementing new
accounting and regulatory requirements. In addition,
Aftab has been a key contributor in multiple
publications and “Thought Leadership” projects on
related topics.

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 PRESENTER:
BIOGRAPHY:
Doug Hart Doug is an Assurance Partner with 38 years of experience
serving technology and consumer companies. Doug is
based in the Bay Area and he has significant experience
DOUG HART with multinational public and private software and SaaS
Assurance Partner & companies, particularly with IPO’s and complex private
equity transactions. Prior to BDO, Doug was a partner
Technology Industry Leader
with a Big Four firm where he spent 21 years, including
415-490-3314
being designated as a Global Account Partner.
dhart@bdo.com
Doug is frequent resource for the media on consumer
business and technology issues and has been a
commentator for a wide range of venues, including CNBC
Squawk Box, Bloomberg TV, The Wall Street Journal,
Forbes, Reuters and Market-Watch.

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 PRESENTER:
BIOGRAPHY:
David Yasukochi David has extensive public accounting experience providing tax
compliance and consulting services, and he is a Tax Partner in the
Orange County office. He has served a diverse group of companies in
healthcare, technology, life sciences, consumer markets, and
DAVID YASUKOCHI manufacturing, and has worked with clients ranging from those in the
development stage to Fortune 1000 companies.
Tax Partner
David’s experience is broad and covers a range of tax services to US
714-913-2597
companies in full scale consulting, tax provision assistance, co-
dyasukochi@bdo.com sourcing and outsourcing engagements. He has worked with
companies on tax compliance and planning, R&D credits, tax
attribute limitation and reductions, tax accounting methods, M&A for
tax, and internal controls over tax. His tax provision experience
includes extensive work in the specific areas of purchase accounting,
stock options, and uncertainty in income tax accounting. David has
worked with several companies whose operations span the globe and
has effectively coordinated worldwide services for those clients.

David has been cited in The Wall Street Journal, Business Week,
Orange County Business Journal and Tax Adviser. He is also a
speaker/lecturer in such forums as Tax Executives International and
colleges and universities. Prior to joining BDO, David was a tax
partner with a Big Four firm in Southern California.

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 PRESENTER:
BIOGRAPHY:
Tony Spillett Tony is a tax partner and the national head of technology and
media sector services, one of the firm's core business sectors. He is
also a member of BDO LLP's Tax Executive Board, which sets policy
for our tax business, the fastest growing UK tax business of the
TONY SPILLETT
global accounting firms.
Tax Partner &
Head of Tech and Media Industry He has a particular interest in advising ambitious and demanding
companies within technology and media through fundraising, rapid
BDO UK
growth, international expansion, investments, corporate
tony.spillett@bdo.co.uk transactions, through their exits and beyond. Tony's clients with
these characteristics include recent start-ups, owner-managed
businesses, AIM, and larger listed businesses. He has prepared and
guided many shareholder teams through the tax issues involved in
the successful exit of their business.

Tony also leads corporate tax compliance projects for very large
corporates, ensuring that such work is not “lost” in a remote
processing centre but receives care and attention, appropriate use
of cutting edge technology/analytics and advisory/planning
thinking from seasoned practitioners.

He leads BDO's services relating to Patent Box and iXBRL and

is experienced in maximising R&D tax incentive claims.

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 Thank You!

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