Deloitte Shared Services, GBS & BPO Conference Breakout 7: Transforming your Tax operating model James Tooley and Demian de Souza, Deloitte 14-15 September 2016 Lisbon, Portugal #DeloitteSharedServices
Agenda Introductions Tax GBS & SSC market trends Tax operating model components Centralising compliance Case Study Q&A
Tax GBS & SSC market trends Thomson Reuters / Shared Service Link Survey Do elements of your tax or financial reporting function sit within shared services? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Indirect tax Direct tax Statutory financial reporting No - it is mainly run in-country It is mainly outsourced No - but planning to move to shared service in future Yes - it sits mainly within shared services Tax now a recognised component of GBS & SSC models Shift from persuade to respond Global tax process owners are increasingly prevalent Centralised Indirect Tax compliance increasingly business as usual Corporate Taxes a more challenging target
Tax GBS & SSC market trends Thomson Reuters / Shared Service Link Survey What are the advantages of moving tax into a GBS / shared service model? 80% 70% 60% 50% 40% 30% 20% 10% 0% Global process efficiencies and standardisation rank higher than cost reduction
Tax GBS & SSC market trends Thomson Reuters / Shared Service Link Survey What are the reasons not to move tax into a GBS / SSC structure? 80% 70% 60% 50% 40% 30% 20% 10% 0% Local knowledge, relationships and language capabilities are seen as barriers Client business cases often also consider software requirements & costs Many of the barriers are not unique to ax.
Tax operating model Layers Scope and design Delivery model In-house teams Service Providers Systems Information and data Organisation and operations Roles and responsibilities Risk management Components Global / local Standardized / bespoke Centralized / de-centralised Single / integrated Tax / Finance On-shore / Near-shore / Off-shore Permanent / temporary Insource / outsource Multiple / single Off the shelf / bespoke Automated / manual Central records / local records Multi-source / central source Stakeholders / delivery obligations Strategic / operational Informal/formal Framework / ad hoc Transparency / no visibility Tax / Business Process People Technology Knowledge
Case Study Centralising Corporate Tax Compliance
Transforming global compliance 30% + Client Goals Simplify service delivery across geographically dispersed offices Establish a single point of contact for global compliance services Standardise the tax compliance processes Safeguard quality and actively manage compliance risk Deliver cost savings of at least 30% to the business through the streamlined delivery of compliance services Partner with a single supplier who can provide a full suite of support services Process People Technology Knowledge
Reliable processes Processes Process Process consistency is paramount 3 level co-source delivery model Min Level of external support Max Bronze Silver Gold Centralising the process has surfaced pain points that need to be addressed e.g. data collection was very localized previously Styles of process improvement looks different across businesses but key steps are often common
The right mix of people A multi-disciplinary team comprising: Tax technical specialists Data management resources IT and Excel skillsets Finance knowledge Project & Process managers and owners 3 rd party providers where appropriate Client established a Direct Tax Centre of Excellence in Budapest Processes Delivery of global Corporate tax compliance from a single team Deployed tax process owners Aggressive push to recruit tax technical resources locally People Prioritised language skills above pre-existing country tax experience Nationalities Skill sets Prepared to call on advisors to provide training and support
Technology trends The availability of local country corporate tax compliance software was initially a deal breaker for the client in determining which countries could be centralised into the tax CoE Processes Technology This proved not to be as critical as first thought There are very few multi country Corporate Tax return solutions on the market. A high degree of localisation lends itself to case by case Excel vs software decisions Their technology priorities focus on: Deploying a consistent platform for task tracking, document management, knowledge sharing and management reporting (ONESOURCE Workflow Manager) Standardising the data collection exercise: aiming for global consistency Strengthening the relationship with a single global tax technology provider: helping shape their roadmap for CIT and Statutory Accounts technologies.
Knowledge is key to success Processes Knowledge Practical problem solving experience Expertise Strong Tax technical knowledge Continuous professional training Regular updates of knowledge databases Combination of Supported by Client uses Deloitte selectively to safeguard against risk and access to local knowledge Deployed focused training ahead of each compliance cycle Periodical Newsletters Updated tax Information per country Tax matrices and overviews Innovative Tax tools Periodical output The knowledge bar in corporate income tax compliance is higher than that that of VAT compliance, but can still be overcome
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