taxlab - deloitte us organising the tax function april 17, ... increased access to internal tax risk...
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TaxLab
Organising the tax function
April 17, 2014
Robbert Hoyng
© 2014 Deloitte The Netherlands
Denying the future
© 2014 Deloitte The Netherlands
Poll Question #1
Wat zijn de belangrijkste uitdagingen van jouw tax functie?
1. Budget druk
2. Personeelsmanagement & resourcing
3. Korte closing periode
4. Bijhouden van nieuwe wet- en regelgeving
5. Data kwaliteit en beschikbaarheid
6. Andere
© 2014 Deloitte The Netherlands
Poll Question #2
Wat kost de organisatie van de tax processen,
per 100mio revenue ?
1. 25.000 euro
2. 100.000 euro
3. 200.000 euro
© 2014 Deloitte The Netherlands
Case studyGlobal tax management challenges
US• Sarbanes-Oxley regulations• Schedule M3 reporting requirement• Uncertain tax position disclosures
Europe
• Trend is to move to e-audits and deliver standard audit file (i.e. new German E-Filing requirements)
Australia• Businesses are assigned a risk rating
by the Australian Tax Office. • Derived from data analytics and risk
profiling techniques
China• Authorities granted
increased access to internal tax risk control systems
India• More audit-based controls • Introduction of strict penalty
provisions including prosecutionBrazil• Elimination of corporate tax return
filings due to large amounts of data maintained by authorities
© 2014 Deloitte The Netherlands
Poll Question #2
Welke activiteit kost het meeste tijd van de tax functie gedurende het
jaar?
1. Algemeen management (tax function)
2. Tax planning
3. ‘Business partnering’
4. Jaarlijkse compliance & reporting
5. Transactionele compliance
6. Transfer pricing
7. Vragen en audits
8. Andere
© 2014 Deloitte The Netherlands
What is necessary for a world-class Tax Function
Effectiveness
Efficiency
Transparency
Strategy
Order 2
Cash
Procure 2
Pay
Record 2
Report
Roles and Responsibilities
Governance
Group Tax SSCFinance Business
Tax processes
Stakeholder Management
Strategic
direction
Key tax and
reporting
activities
Business
Inquiries &
auditsAnnual
CompliancePlanning
Transaction
Compliance
ReportingTransfer
PricingOther
Organisation People Data Systems RiskSupporting
infrastructure
© 2014 Deloitte The Netherlands
Efficiency‘in control’ processes
– Many organizations operate in a siloed, linear environment, without leveraging the synergies and
efficiencies across key areas
– Process improvement, enabled by proper technology allows for a reduction in unnecessary work
Continuous manual data retrieval and reconciliation
Ad hoc manual data retrieval for planning and strategy
Forecast
Manual data input
Forecast ETR
Provision
Manual data input
Tax accruals& disclosures
Return
Manual data input
Taxreturn
R&D
incentives
Manual data input
Benefit reports
VAT
Manual data input
VAT returnCash flow mgt
© 2014 Deloitte The Netherlands
Efficiency (cont’d)Record-to-report cycle
Tax process
Output
Reports
IFRS taxDisclosures
HFM, SAP BPC, and IBM Cognos.
Co-only
Manual
ERP
Excel
Input
Source data Data collection Consolidation
Process
Co-only
Local GAAPTax
Disclosures
Manual data
Webform
Tax Data
IFRS Data
Local GAAP data
Calculation
Tax Forecasting
CIT or VATtax return
© 2014 Deloitte The Netherlands
Poll Question #3
Welke van de volgende gebieden hebben de grootste impact op
transformatie binnen jouw tax functie?
1. Beschikbare resources / mensen / capaciteit
2. Ons technologie landschap
3. Waardering voor tax van ons management (CFO/CEO etc.)
4. Koppeling corporate strategie met de tax strategie
5. Andere
© 2014 Deloitte The Netherlands
Tax transformationAlignment with business maturity
The role (and potential need for improvement) of the Tax Function varies with the maturity level of the
organisation.
Growthrate
Time
Phase 1 - Introduction Phase 2 - Growth Phase 3 - Maturity
Operational risk management Avoid failures, e.g. fraudMeet Business Control Framework
requirements
Meet Business Control Framework
requirements
Tax planning Utilisation of tax facilities Avoid business disruptionActively manage tax portfolio through
planning
Tax compliance / filing Compliance oriented Process oriented IT oriented
Tax reporting Report ETR Manage ETR Plan ETR
Risk No risk register Periodic risk register Continuous monitoring
1
2
3
© 2014 Deloitte The Netherlands
Tax transformation (cont’d)Alignment with business maturity
Driving Value through
Analytics
Concentration of
processes
Valu
e
Standardisation of
processes
1
2
3
Automation of
processes
Time
4
© 2014 Deloitte The Netherlands
ApproachEnablers of the tax function
Talent & People
• Talent enables the organization to pro-actively act on business
developments and economic, tax and legal circumstances.
People make sure that compliance and reporting obligations are
met.
• Sufficient tax knowledge and awareness are key to create and
control the tax environment.
Information & Automation
• Information flows are the basis for acting and reacting to
developments. Communication is essential.
• Automated solutions are an integrated part of business and
finance processes. To ensure that tax is covered and tax
obligations are met, tax should be part of the automated solution
design.
Policies & Procedures
• Tax can be part of the business policy and/or governance to
achieve their goals. Also, decisions made will be in line with the
business policies.
• With regard to efficiency, timeliness and correctness, processes
should be defined clearly. Procedures can enable people to
perform their duties and secure future cooperation.
Tax Structure & Sourcing
• Tax payers have several layers and obligations with regard to
tax. Therefore roles and responsibilities regarding tax should be
clear, fit the operating model and department capabilities.
• Decisions with regard to outsourcing and co-sourcing enables to
meet tax requirements efficiently.
© 2014 Deloitte The Netherlands
ApproachExample roadmap
Standardization
Topic2014 2015 2016
Ambition
2020
E2E Manage Taxes
Process
• Cycle time filing & reporting
• Accurate compliance & reporting
• Process excellence
• Sustainable monitoring and tax
control
• Integration and standardization of
enabling landscape and system
architecture
Maintain tax master
data • Clear guidelines for TP policy
implementation into master data
Maintain tax policies
& procedures
• Implement standardized processes
• Clearly defined roles &
responsibilities and back-up
structure
• Shared, standardized information,
documentation, resources and
policy & procedures
Perform knowledge
management
• Sufficient, shared and sustainable
tax knowledge and awareness
throughout the global organization
Perform tax
planning/strategy
• Optimization of sustainable tax
planning and global tax cash
optimization
Perform tax risk
management• Standardized tax risk management
process facilitated by automation
Monitor tax
compliance• Insight in global tax compliance
status
Manage tax
provisions• Standardized and optimized UTP
recognition and determination
Perform tax reporting• Automated (improved) tax reporting
template for efficient consolidation
and tax reporting positions
Prepare returns
(indirect) • Automated tax determination
Identification Roll-outPilot Value realization
Phase
T05 Design PIL
T05 Implement PIL
T02 VAT Analytics T04 Data analytics (improvement initiatives)
T01 TA Analytics T04 Data analytics
T03 T&C Analytics T04 Data analytics
T06 Tax Dashboard
T07 TP
RACI
T10 RACI
T11 Central Repository
T12 GSA
T13 Esc
T14
T15 Tax Learning
T16 Scenario Planning
T17 Tax Opt Study
T18 Tax Risk Control
Monitoring
DDT
T21 UTP
T22 Tax Pack
T23 Automate AP
T24 VAT add on
T08 Process
T09
P&P
Aris
T19
T20
© 2014 Deloitte The Netherlands
ApproachExample roadmap (cont’d)
Roll-out
1. Remaining countries / entities / tax processes
2. Current state analysis
3. Fit-gap analysis
4. Implementation of Tax processes, RACI, Control Measures, P&P, Tax Dashboard
and Central Repository
Roll-out (based on project charters) remaining standardization projects
Prioritize & Project
Charter
RACI / Control
Measures
Tax Central
Repository / Tax
DashboardTax processes
The level 4, 5 and 6 To-Be
standardized process
design and documentation
for tax has been delivered
Validation workshops
Tax strategy workshop
Prioritize standardization
topics
Develop project charter for
all key defined projects
with the objective to
schedule budget and
resources
Design To-Be
standardized RACI’s and
Control Measures for all
tax processes on level 5
and 6
Assumption that level 4
design has been
performed by xxx.
Draft To-Be Tax Policies &
Procedures
Tax Policies & Procedures
will be based on existing
materials
Functional design req.
repository for shared,
standardized processes,
information, resources and
policy & procedures
Functional design req.
dashboard to create clear
overview of tax kpi’s
Q1/2/3/4/2014 Q4 2014
De
sig
n
Review/Analysis Pilot ImplementationTax processes, RACI, Control Measures and Policies &
Procedures
Q1/2 2015 Q1/2 2015
Pilot implementation:
1. Selection of countries / entities / tax processes
2. Current state analysis
3. Fit-gap analysis
4. Implementation of Tax processes, RACI, Control Measures and P&P
Pilot implementation review consisting of:
1. Evaluate of pilot implementation (1) start-up and design, (2) Implementation
and (3) Handover, Operations and User Perspective
2. Lessons learned per key issue, lessons and action (to be) taken
3. Transition to Roll-outPilo
t Im
ple
men
tati
on
Remaining standardization topicsTax processes, RACI, Control Measures, Policies &
Procedures, Central Repository and Tax Dashboard
Q2/3 2015 2015 / 2016
Ro
ll-o
ut
Policies &
Procedures
Q1 2015