Asia Tax Forum. TAX TRANSFORMATION Unlocking the value of data, processes and people with TECHNOLOGY

Transcription

1 TAX TRANSFORMATION Unlocking the value of data, processes and people with TECHNOLOGY Presented by Kim JaeSon Vice President, (Asia) Tax & Accounting Thomson Reuters

2 HEAD OF TAX A HEAD FULL OF RESPONSIBILITIES & CHALLENGES REPORTING ACCOUNTING PLANNING IFRS TRANSFER PRICING AUDIT DEFENSE INCOME TAX INDIRECT TAX OECD COMPLIANCE CHINA BRAZIL

3 METRICS THAT MATTER TAX RATE CASH FLOW COMPLIANCE COSTS RISK

4 CHALLENGES IMPACTING EFFICIENCY ACROSS TAX OPERATIONS DATA PROCESSES PEOPLE

5 DATA CHALLENGES GAINING ACCESS TO QUALITY DATA REQUEST DATA FINANCE / IT DEPARTMENTS WAIT GLOBAL TAX TEAM

6 DATA CHALLENGES ACCESSING AND RE-USING VALIDATED DATA PLANNING ACCOUNTING COMPLIANCE AUDIT TAX FUNCTIONS DO NOT LEVERAGE WORK & CALCULATIONS, DUPLICATED TIME IN COLLECTING AND MANIPULATING DATA

7 PROCESS CHALLENGES INEFFICIENT TAX PROCESSES

8 PROCESS CHALLENGES DOCUMENT MANAGEMENT

9 PEOPLE CHALLENGES DIFFICULTY COMPLYING WITH GLOBAL REGULATIONS

10 PEOPLE CHALLENGES TRAINING & RETAINING PEOPLE PROVISION CORPORATE TAX TRANSFER PRICING INDIRECT TAX

11 TAX TRANSFORMATION ACHIEVING EFFICIENCY ACROSS TAX OPERATIONS

12 TAX TRANSFORMATION DATA TAX TECHNOLOGY: UNLOCK THE VALUE PROCESSES PEOPLE

13 TAX TECHNOLOGY TRANSFER PRICING CORORATE TAX COMPLIANCE TAXATION RESEARCH SOFTWARE SOLUTIONS FOR GLOBAL TAX MANAGEMENT WORKFLOW WORKFLOW MANAGEMENT MANAGEMENT TAX PROVISIONING TAX PROVISIONING INDIRECT TAX MANAGTEMENT

14 TAX TRANSFORMATION TAX LIFECYCLE: PLANNING ACCOUNTING COMPLIANCE POTENTIAL FOR RE-USE OF INFORMATION AND DECISIONS AUDIT

15 TAX TRANSFORMATION HOW CAN TAX TECHNOLOGY HELP? REDUCE RISK OF ERROR STREAMLINE PROCESSES, FREE UP STAFF TIME IMPROVE QUALITY AND ACCESSIBILITY OF DATA ELIMINATE KEY PERSON DEPENDENCY IMPROVE VISIBILITY AND CONTROL DEMONSTRATE CONTROL TO AUTHORITIES

16 TAX TECHNOLOGY INDIRECT TAX Asia Tax Forum INDIRECT TAX DETERMINATION & COMPLIANCE TECHNOLOGY

17 TAX TECHNOLOGY INDIRECT TAX Asia Tax Forum BUSINESS PROCESS, SYSTEMS & TAX ENVIRONMENT Legal Entities? Operations US EU LA AP? Business Systems Applications Interfaces Tax Systems SFA CRM Quote Tax App1 Oracle Sales Process Tax App2 SAP Ariba Purchase Process Custom/Native Legacy Home Grown OE Inv AR Req PO AP ERS FA Proj = Tax decision-related codes, programming or logic Post-Purchase Process Manual Inv. Move JE? Excel

18 TAX TECHNOLOGY INDIRECT TAX A REAL DAY IN THE LIFE OF TODAY S TAX (and IT) PROFESSIONAL Manual Tax Policies Global Transactions Manual Tax Policies Determination Liability Data Reporting Checking Filing Remittance What is really the Tax department s main objective? What are they (i.e. Tax & IT) currently doing? What is the problem with what they are currently doing? And why? Errors with manual tax decisions causes over-payments, under-payments, penalties & assessments Tax decisions in multiple places offers no control or consistency with treatments. Tax results data in multiple places slows down reconciliation, and increases the risk to the compliance and audit defense processes. Tax and IT are burdened with ongoing changes in their ERP for analysis, possible changes and testing Expansion into new territories exacerbates all of the above.

19 Response TAX TECHNOLOGY INDIRECT TAX Asia Tax Forum INDIRECT TAX TECHNOLOGY AUTOMATES THE DETERMINATION SAP Oracle PeopleSoft E-Com Legacy Billing Custom Excel Request Returns Filing & Remittance Tax Policy Compliance Data Audit Defense Global Tax Engine

20 TAX TECHNOLOGY INDIRECT TAX Asia Tax Forum INDIRECT TAX TECHNOLOGY SUPPORTS ENTIRE PROCESS END-TO-END x BEFORE x x x x x Manual Global Manual Determination Liability Reporting Checking Filing Remittance Tax Policies Transactions Tax Policies Data AFTER Indirect Tax Determination Indirect Tax Compliance Global Transactions Automated Determination Liability Data Reporting Checking Filing Remittance Global Tax Policy

21 TAX TECHNOLOGY INDIRECT TAX THINGS YOU NO LONGER HAVE TO DO Asia Tax Forum Check for changes to Tax Content Schedule IT for changes to condition tables Make changes to all applicable locations Test changes Manual tax determinations Update cheat sheets Train new Purchasing and AP personnel New tax content source for new countries Consolidate tax liability data for compliance Consolidate tax liability data for audit defense. Analyze planned acquisition impact on Tax Prepare for operations in India and Brazil

22 TAX TECHNOLOGY INDIRECT TAX Asia Tax Forum AKIN TO HAVING YOUR OWN GLOBAL TAX RESEARCH & CONTENT TEAM Continuous delivery of time-sensitive global tax content, research & changes: - Rates, rules and product taxability for more than 170 countries Continuous delivery of calculation method exception treatments: - Max tax, inclusive tax, tax-on-tax Continuous delivery of cross-border logic and rules: - Intra-community dispatch, acquisition, interstate transactions, triangulation rules Continuous delivery of anticipated updates: - Updates may occur mid-month or even next year

23 CASE STUDY: CISCO SYSTEMS Asia Tax Forum CHALLENGES and REQUIREMENTS: Tax Challenges: - Tax consolidation and visibility a challenge with tax professionals and systems distributed worldwide - Central audit and compliance database needed to manage expansion into new markets - Cisco needed a solution that could provide real-time global tax determination for each transaction Technical Requirements: - A single, centralized tax solution that could connect to all systems worldwide with scalability and performance capabilities necessary to support significant global transaction business volume Business Requirements: - A solution that empowers Cisco s tax professionals to quickly and easily implement tax, business and system changes without requiring substantial support and custom programming by IT

24 CASE STUDY: CISCO SYSTEMS Asia Tax Forum BENEFITS FROM INDIRECT TAX TECHNOLOGY: Improved tax department s ability to respond rapidly and accurately to business change Cisco is now able to significantly increase the accuracy of sales, use, and VAT determination on all sales and purchase transactions worldwide. Cisco now has real-time visibility and control through the identification of its transaction tax exposures for all transactions worldwide. The time required for returns processing is also reduced, thereby enabling more time for strategic tax planning and analysis. Reduce unnecessary IT and tax costs Cisco is able to reduce costs related to system maintenance and increase responsiveness and efficiencies for its global sales and procurement activities. The expensive-to-maintain VAT system used in the past, is also eliminated.

25 TAX TECHNOLOGY TRANSFER PRICING OPERATIONAL TRANSFER PRICING TECHNOLOGY

26 CASE STUDY: FORD MOTOR COMPANY TRANSFER PRICING LIFECYCLE

27 CASE STUDY FORD MOTOR COMPANY TRANSFER PRICING LIFECYCLE

28 CASE STUDY: FORD MOTOR COMPANY CHALLENGES: Asia Tax Forum 4 month process to calculate worldwide true ups: - Challenge getting information - Not correct level of detail (6 to 8 weeks to get proper level not immediately available) - Excel process (access was advanced) - No uniform approach or process (what accounts used different around the world what accounts were value adding, cost + markup pensions) - Many different types of transactions Out of sync with tax strategy: - Challenges forecasting - Delay of actual results Costly results: - Overpaying in countries (Russia, Colombia) - Quarter to quarter etr variances - True ups

29 CASE STUDY: FORD MOTOR COMPANY Asia Tax Forum BENEFITS FROM OPERATIONAL TRANSFER PRICING: People: - Able to provide timely information not possible before - Structure process worldwide - Reduced time from 4 months to 4 hours Dollars: - Reduce audit risks, fines and penalties - True forecast and tax planning (tighten ranges) - Proactively manage internal prices to reduce overpayments Management Benefits: - Decrease ETR variances quarter-to-quarter - Get information earlier to manage process better - Quicker results allow true ups in provision

30 THANK YOU