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Headline Verdana BoldManaging taxBalancing current challenge with future promiseThe EYE, Amsterdam, 30 November - 1 December 2016

Realising the benefits of integrated process delivery

David Wright, Deloitte UKLaurent Nowicki, Deloitte Belgium

3

Introduction: why integrate these processes? 4

Components of the tax function 5

Integrated statutory accounting and corporate income tax process 6

Defining roles and responsibilities 12

Supporting technology 15

Contents

©2016. For information, contact Deloitte Touche Tohmatsu Limited.

4

Statutory accounting and corporate tax reportingWhy integrate these processes?

• Harmonised end to end compliance process

• Integrated workflow management

• Simplify data management

• Reduce lead-time and efforts

Process efficiency

• Greater visibility of filing status

• Transparency of filings through generally accepted accounting principles (GAAP) to tax reconciliations

• Increased data consistency

• Increased quality of filings

Risk management


5

Components of the tax function

Key stakeholders


6

Defining the components of the tax function

Compliance

• Master data management

• Tax return data

• Local statutory accounts

• Return preparations

• Compliance outsourcing

• Transfer pricing (TP) documentation preparation

Accounting and reporting

• Financial close for tax

• Reconciliations

• Indirect tax

• Accounting analyses for tax

• Management reporting on tax

Tax strategy

• Tax objectives

• Tax strategy

• Technology strategy

• Tax risk framework

• Process determination

Operational risk management

• Controls operation and internal audit

• Technology tools

• Compliance manual

• Tax risk register

• Tax audit support

• Tax litigation

Organisation and resources

Automation and technology integration

Operational Strategic

More likely in shared service centre (SSC) More likely in tax


7

Integrated statutory accounting and corporate income tax process


8

People

International and multidisciplinary team

Strong accounting and tax expertise

Project management specialists

Process

Standard and scalable processes

Standardised deliverables

Central management and governance

Technology

ERP andmiddlewares

Specific production tools

Global entity management tool

What is key to build an integrated statutory accounting and corporate tax process?


9

Components of a standard end to end compliance processStatutory accounting and corporate tax reporting

• Standardisation of processes

• Fully documented: audit trail

• Flexible and scalable

• Standardisation of deliverables

• Support local requirements


10

An integrated, state of the art, statutory accounting and corporate tax process

• Management of deadlines

• Governance

• Review non-routine business events

• Preparation and integration of material provided by client (PBC): Stat Acc., CIT, Audit

Q4 working session meeting

• Provide non-financial data • Business information update

• Management of external audit and statutory process (group and statutory)

• Clarify/confirm ad hoc matters

• Review and approve • Submit Statutory

Financial Statements (SFS) and CIT return

• Reporting on statutory process and continuous process improvement (CPI) initiatives

• Automate data extraction for Enterprise Resource Planning (ERP) reports (Trial Balances (TBs), General Ledger, Fixed Assets, Re-valuation reports…)

• Access financial information throughBalance Sheet reconciliation (middleware)

• Preparation of Mgmt. to Local GAAP and tax adjustments

• Preparation of local GAAP TB, FinancialStatements and equity reconciliation

• Prepare Local Tax Provision (LTP),Corporate Income Tax Return (CITR) and Return to Provision (RTP)

• Provide support to reviewers

• Store on GMT

• Audit procedures• Provide proposed audit adjustments • Review and

approve

SS

C /

RC

OE

Delo

itte

Au

dit

or

Su

pp

orti

ng

Tech

no

log

y

Data

collection

Data

validation

Data

processing

Deliverable

drafting

Review and

sign off

Submit and

archive

Management

reporting

Process

planning

SFS and CIT specific toolsERP/middleware

Global management tool

Integrate country by country (CBC) additional data points in PBCs e.g., tax cash and income by party (IC/external)

Review CBC and TP ratios

Consolidate CBC/ TP reports

E-filing softwareDeloitte Conversion Tool (DCT)


11

Global management system

Key areas of improvement

• Harmonise deliverables and reconciliations across all jurisdictions/Legal Entities (LEs)

• Reduce lead-time

• Include Tax and TP teams (Process design and RR)

• Deploy a global data management platform to monitor filings and access data

Efficient end-to-end statutory accounting and corporate tax process:

• Combined stat and CIT process

• Integrates all stakeholders

Leverage technology:

• Automate core data extraction

• Leverage middleware systems

Standardisation of processes and deliverables

• Standard deliverables

• Reconciliation GAAP to Stat to Tax (tax bridge)

Opportunities

• Harmonise production tools

• Connect output to Deloitte CbC Digital Exchange (CDX) (TP)

• Leverage available multi-years statutory accounting and CIT data to perform analytics


12

Defining roles and responsibilities


13

Key stakeholders


ON-SHORE/VIRTUAL− Oversight and control− Risk and opportunity

FAR-SHORE/FINANCE AND ACCOUNTING (F&A)− Language independent− Rule based processing

ON-SHORE− Not involved− Involved in high complexity

business/jurisdictions− Clustered/regional

SSC

CoELocal Finance

Tax

NEAR-SHORE CENTRE OF EXCELLENCE (CoE)− Language dependent− Tax technical


14

Map standard process to your own organisation



15

Supporting technology


16

Technology landscape

Integrated statutory accounting and corporate income tax

Core ERP

Oracle/SAP…

Consolidation System

Oracle Hyperion Financial Management (HFM)

2

IFRS / USGAAP

Local GAAP

1

Complex Jurisdictions*

Mgmt. to Statutory ledgers

Middleware

4

All countries

Tax Provision

Middleware

3

BS rec’n

Middleware

Mgmt. Reporting

Ad hoc reporting layer

6

SFS and CIT returns

Local Tools

5

Global management tool

CBC

SFS CITR

Single recipient for all statutory data and source of cross-border standardised reporting

US 10K

ConsoSFS


17

Technology - Deloitte Conversion Tool (DCT)

Replacing previous Excel based conversion files, The Deloitte Conversion Tool (DCT) is an application developed by Deloitte to support GAAP to GAAP reconciliation and provide companies with multiple reporting functionalities.

Key Benefits

• Reduce risk

• Achieve greater visibility

• Save time

• Ensure standardisation

• Improve consistency

• Minimise ongoing report maintenance


18

Faculty

David Wright, Deloitte UK

Partner

Laurent Nowicki, Deloitte Belgium

Partner

[email protected]

+44 20 7303 4641

[email protected]

+ 32 2 800 25 11


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© 2016. For information, contact Deloitte Touche Tohmatsu Limited.

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