Thriving in Diversity and Change 2015 KPMG Asia Pacific Tax Summit

Transcription

1 Thriving in Diversity and Change 2015 KPMG Asia Pacific Tax Summit The Ritz-Carlton, Millenia Singapore January 2015

2 The Evolution of Tax Operating Models & Tax Risk Introduction

3 Panellists Panel: The Evolution of Tax Operating Models and Tax Risk Julie Hughff Global Head of Tax Consulting KPMG Andrew Mills Second Commissioner, Law Design & Practice Group Australian Tax Office Chris Nguyen Regional Tax Planning Co-ordinator Chevron China Tracy Zhang Tax Partner, Tax Consulting KPMG in China John Salvaris Tax Partner, Tax Consulting KPMG in Australia 3

4 Challenges - External and Internal Governance Tax revenues Controversy Tax Authorities Cost reduction Finance change Technology Regulation Data sharing Transparency Tax Functions Tax Advisors Off-shoring Outsourcing Globalization 4

5 Tax Function and Authority Evolution TAX FUNCTION: The focus of the tax function has evolved over time as its responsibilities have increased and it has been expected to deliver more with less. Embed tax into ERP systems Delivering cash tax savings or deferral ETR optimisation Ensuring accuracy and timeliness of financial reporting and compliance Managing tax risk and tax authority audits Controlling costs shared services, outsourcing, etc. Increasing efficiency ERP implementations, tax technology, etc. Managing information for country by country reporting, CRDIV, Transparency, etc. Managing reputation with a focus on tax in the media From downstream outputs to upstream data Automation of compliance activities Real time data access vs. returns years ago 5-10 years ago Today 5 years ago Today Value / What Risk / How Cost Transparency Beyond Data and Automation 5

6 Tax Function and Authority Evolution TAX FUNCTION: The focus of the tax function has evolved over time as its responsibilities have increased and it has been expected to deliver more with less. Embed tax into ERP systems Delivering cash tax savings or deferral ETR optimisation Ensuring accuracy and timeliness of financial reporting and compliance Managing tax risk and tax authority audits Controlling costs shared services, outsourcing, etc. Increasing efficiency ERP implementations, tax technology, etc. Managing information for country by country reporting, CRDIV, Transparency, etc. Managing reputation with a focus on tax in the media From downstream outputs to upstream data Automation of compliance activities Real time data access vs. returns years ago 5-10 years ago Today 5 years ago Today Value / What Risk / How Cost Transparency Beyond Data and Automation Substantive testing (of the what ) Audits 2-3 years after transactions (compliance cycle) Systems testing (of the how ) Tax in the Boardroom Helping to comply FCA/ACA RDF rolled out SBR/data matching Real time PCR/RTP compliance activity ECAP pilot BEPS and top down global view of MNCs Automatic Exchange of Information FTA, SGATAR, JITSIC expanded Data analytics and testing From downstream outputs to upstream data Automation of basic audit activities TAX AUTHORITIES: The focus of the tax authorities has evolved over time Real time data access vs. returns 6

7 How are Tax Functions responding? 62% of tax functions were engaged in or considering overall tax strategy and operational reviews 49% of tax functions were engaged in or considering organisational structure reviews 69% of companies had undertaken risk management and/or controls improvements Over 1/3 of companies had undertaken either ERP or shared service centre implementations or reviews, but in only 30% of cases was the tax function integrally involved Ensuring clarity of accountabilities and responsibilities Driving standardization to automate and control Improving business partnering and connectivity 7

8 Tax Operating Model Framework VISION WHAT DOES SUCCESS LOOK LIKE? The tax function s defined high level strategic goals and the target service it aims to deliver to internal and external customers VISION TAX POLICY AND TAX STRATEGIES HOW WILL WE ACHIEVE IT? The tax function s defined policy and strategies to deliver the vision, developed into design principles TAX POLICY AND TAX STRATEGIES TAX OPERATING MODEL HOW WILL WE OPERATE? The high level conceptual view of the components delivering the strategy TAX OPERATING MODEL HOW WILL WE DELIVER? The detailed design of the components underpinning the architecture Governance and Risk Organisational Model People and Capability Process and Responsibility Data and Information Systems and Technology Performance BUSINESS CASE HOW WILL WE BENEFIT? The economic model of value, costs and capacity BUSINESS CASE 8

9 COMPONENT DEFINITIONS Components of the Tax Operating Model Governance and Risk Governance required to direct the tax function Enabling culture (behaviours/values) required to deliver Key tax risks, identified mitigating factors and tax control framework Influencing stakeholders Process and Responsibility Key processes required to deliver the tax operating model: Ownership and governance Operational responsibility Policies Efficiency of practice, cost and service level drivers Performance Organizational Model People and Capability Tax organisation structure, including headcount sizing, roles, reporting lines, spans and layers End to end sourcing and location strategy, including tax activity delivery model, location of assets and sourcing model Required employee profile to deliver tax operating model: Skills, capabilities, development needs and training Strategy to retain and engage key talent Succession planning Data and Information Systems and Technology Governance of data and information ownership and quality Effectiveness and efficiency of delivery of data and information to the business Use of information to support decision making Core financial and other systems that provide the required data and information to deliver tax processes Dedicated tax technology that enables tax processes Infrastructure architecture and supportmodel Key performance metrics used to measure, track and reward performance of the tax function (financial, operational and people metrics) 9

10 Components of the Tax Operating Model Governance and Risk Organizational Model People and Capability Process and Responsibility Data and Information Systems and Technology Performance 10

11 Journey to the Tax Function of the Future Governance and Risk Organizational Model People and Capability Process and Responsibility Data and Information Systems and Technology Performance Establish the as-is position Develop the tax vision and policy Design the organisational model Deploy the right people with the right skills Embed efficient processes Implement effective technology solutions Manage risk and create appropriate KPIs Tax function of the future 11

12 The Evolution of Tax Operating Models & Tax Risk Audience Q&A

13 The Evolution of Tax Operating Models & Tax Risk Key Messages

14 Thank you Presentation by Name Surname

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