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KPMG’s TaxOne – Transform your tax function by leveraging best-of-breed tax technology
Zurich, 4th June 2015
Hartwig Hoffmann, Christoph Funke
Holger Eilers, Andreas Wiesner
kpmg.ch
2© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Wrap-up and closing
Agenda
Welcome and introduction to TaxOne Platform
TaxOne Compliance Manager & Analyzer
Breakout sessions: A structured Transfer Pricing documentation Efficient and integrated TaxOne reporting
18:30h – 18:45h
16:30h – 16:45h
16:45h – 17:45h
17:45h – 18:30h
Apéro riche18:45h – until end
Welcome & Introduction to TaxOne
4© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Tax function evolution
10-15 years ago 5-10 years agoValue
Risk
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.
■ 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.
■ Delivering cash tax savings or deferral
■ ETRoptimisation
Cost
Transparency
■ Managing information for country by country reporting, CRD IV, etc.
■ Managing reputation with a focus on tax in the media
Today – 5 years ago
Today
Compliance
5© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Do you face the same challenges?
Increased complexity of global business models
Lack of tax information at headquarter and lack of transparency in tax processes
Tight closing deadlines create condensed cycle times for tax information management
Financial Controllers have different degrees of understanding in regard to tax requirements
Global tax complications such as working with multiple entities, currencies, tax legislations and multi-level tax processes
Legal requirements are on the increase but headcount in the tax department continues to decrease
Tax personnel spend a significant amount of time manually gathering and validating data and spreadsheets – they have minimal or no time to carry out any value-added analyses
6© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Reporter
TaxOne
Planner
TaxOne
Compliance Manager
TaxOne
Transfer Pricing Data Manager
■ Monitor and control tax risks and compliance as well as tax payments by using the dashboard
■ Manage all relevant deadlines with tax calendar
■ Flexible Questionnaire functionality■ Archiving of tax-relevant documents
■ Calculation of current and deferred taxes according to IFRS and local GAAP as well as tax rate reconciliation
■ Consolidated analyses for the individual reporting units
■ Supply of data for notes in various reports/ disclosures in line with IAS 12
■ Forecast for different tax positions■ Multi-year planning (e.g. ETR)■ Tax Controlling
■ Global solution for transfer pricing documentation■ Supports both centralized and decentralized
approach
TaxOne – An all-inclusive Tax Information Management Solution
TaxOne
Contract Manager
■ Corporate governance of contracts
■ Transparency on contractual relationships
■ Transparency on Terms & Conditions
TaxOne Analyzer
7© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne – Extract from our References
Transparency on tax risks and compliance
9© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Latest Global KPMG Tax Management Study
10© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Compliance ManagerKey functionalities
The dashboard reports on your key figures and statuses, such as deadlines for filing tax returns, tax payments and tax audit risks
Flexible Questionnaire functionality
The tax calendar provides an overview of all deadlines
Monitoring of the status of each tax risk position indicated in red, amber or green
Sophisticated data upload and filing functions for relevant tax documents
Automatic reminder functions that send emails to those responsible when pre-defined deadlines are reached
Flexible definition and monitoring of tax processes
11© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Setting the Scene
Christoph Funke
Ketinax International AG, Headquarter
Responsible for group tax risk and compliance & treasury
Holger Eilers
Acreda GmbH, German entity
Responsible for tax risk and compliance at a local level
12© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Benefits of using TaxOne Compliance Manager
Entry and monitoring of tax compliance issues at entity and group level Monitoring of deadlines with indications (escalation levels) with automatic
reminder emails
Grouped overview on single topics (Tax Compliance, Tax Audits, Tax Payments, Consulting Costs)
Easy identification of challenging areas
Group-wide overview of future and past tax payments/reimbursements Monitoring of deadlines with indications (escalation levels) and automatic
reminder emails
Entry and monitoring of tax audit risks at entity level Group-wide overview of total of tax risks and potentially necessary adjustments
to provisions (Tax transparency)
Freely definable process steps and responsibilities Escalation concept and possibility to attach documents
Transparency in tax compliance at both global and local level
Monitoring of enterprise-wide tax risks and obligations
Top-down dashboard view on essential tax areas
Efficient managing of total tax contribution
Flexibility in defining and monitoring ad-hoc processes
TaxOne Analyzer
14© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Analyzer
Overview
Fully flexible creation of reports individually tailored to your specific demands
Utilization of data from throughout all available TaxOne modules to create a topic related data output in your report format
Functionality Features Optional
Comprehensive individual data reporting Access to all data entered and calculated in each of the modules of TaxOne
Extensive options for report design (e.g. graphs, charts, tables, etc)
Combine relevant information into one report exactly designed down to your specific reporting demand (e.g. creation of Management reports).
➜ Automatic and ad hoc genreation of reports, based on latest information derived for the modules of TaxOne
Several exporting options and report formats: PDF, Powerpoint, Excel, Word, etc.
Data utilization from external data sources
Additional features, such as mobile capability
15© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Reporter
TaxOne
Compliance Manager
TaxOne
Transfer Pricing Data Manager
TaxOne Analyzer
TaxOne Analyzer
File
Excel
XML
SAP; Oracle; Others
Data WarehouseData Mart
16© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Analyzer
Management Reporting
Examples
Country by Country Reporting
Efficient and integrated Tax Reporting with TaxOne
18© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Challenges in Tax Reporting
Low level of automation
Complex business models
Coordination with Accounting
Fulfillment of IAS12 reporting
requirements
Tight deadlines
High risk of data inconsistencies
Lack of transparency in
regard to key factors
TaxFunction
19© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Calculation of current and deferred tax and assessment of tax
disclosures with REPORTER
TaxOne Reporting process
(Local) ERP systems
Consolidation systemGroup reporting
4) Booking of tax values
5) Validation between booked and calculated values in TaxOne
6) Validated tax data available for group reporting
3
(Local/Global) ERP systems
1
21) Import of balance sheet values
(Local GAAP/IFRS) via automatic Web Service or CSV/XML
2) Tax data processing and calculation (current and deferred taxes)
3) Automatic generation of notes
20© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Reporter
• Pool of data is consistent, thanks to a standardized tax calculation and reporting on ONE web-based platform
• Data is highly transparent and readily available
• The centralized database makes local entity entries immediately available group-wide
• Key positions and how they develop is easily retrievable both at group and entity level
• High degree of integration into exiting system landscape to ensure maximum process automation
• High degree of automation in reduces manual work (opening balances, losses, tax groups)
• Notes to financial statements according to IAS 12 are automatically generated
21© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Setting the Scene
2014 year-end reporting for Accreda GmbHMonitor and review 2014 consolidated group reporting
Correct entries for final submission Review corrections and create group reports
Christoph Funke
Ketinax Group, Headquarter
Responsible for group-wide tax reporting
Holger Eilers
Baida, Singapur
Responsible for tax reporting at local level
22© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Benefits of using Reporter
Develop, utilize and valuate tax losses Automatically consider balance sheet differences that are income statement-related Calculate deferred taxes on balance sheet differences and tax losses Benefit from the automatic true-up functionality
Customizable import interfaces (manual or automatic) to upstream systems: - Import of balance sheet and p/l account values
Customizable export interfaces (Manual or automatic) to downstream systems possible - e.g. for validation with booked values on consolidation system
Local entity entries immediately available through centralized database
Transparent, detailed group and entity-based overview on the development of key positions
Automatically generate reports required for your tax notes (e.g. Reconciliation & ETR) and further relevant reporting figures
Automatically generate a pool of data for Notes to financial statements according to IAS 12 Benefit from customizable reporting groups
Three planning types are available (multi-year planning, forecast & tax audit simulation)
Automatic import of values from TaxOne modules and from external systems
Calculate and report current and deferred tax consistently and in a standardized way
Automatically generate a pool of data and reports for tax notes
Interlink it with upstream systems
Increase the quality and transparency of your data at local and group level
Benefit from a fully integrated tax planning
A structured Transfer Pricing documentation
24© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Module TaxOne Transfer Pricing Data Manager – Design Principles
• For most countries there is today a historical track record how tax authorities deal in practice with transfer pricing documentation requirements. Based on this experience there is a clear tendency that tax authorities are much more focused on specific transfer pricing information and are not any more predominantly interested in a large quantity of information
• This gives space to taxpayers to streamline their documentation reports and establish lean and more efficient documentation approaches. Such documentation approaches usually show the following features which are also the design principle of the TaxOne Transfer Pricing Data Manager:
High flexibility through modular structure
Information is only used once in order to avoid double work and thus inconsistencies
Central coordination and local customization
Focus on penalty protection and shift in burden of proof
25© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOneModule TaxOne Transfer Pricing Data Manager – System Structure
Level 1 – Documentation Period● Definition of documentation period (e.g.
2014)● Select group entities for TP
documentation
Level 2 – Master Data● Definition of value chains & transaction
groups● Attribute of roles to legal entities (e.g.
distributor, manufacturer) ● Pre-setting of functions & risks and
transfer pricing analysis parameters
Central users (e.g. GroupTax) only
Level 3 – Edit documentation● Add specific information for each
transaction● Transfer pricing analysis including arm`s
length test for each transaction / legal entity
Input by local or specific users (e.g. SSC)
26© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
TaxOne Benefits of using Transfer Pricing Data Manager
■ Support in the preparation and defense of the transfer pricing documentation in local audits
■ Reduce the risk of penalties and income estimation because of violations against legal obligations to prepare documentation
■ Efficient handling of documentation workload by relying on structured information entry screens, templates and default texts
■ Standardized documentation processes, which consider data entered regarding previous periods
■ Documentation completeness check on a company level, value chain level and transaction level (traffic light system)
■ Available reports enable a risk oriented review considering transaction amounts and transfer pricing methods applied
■ Involvement of central and local resources taking into account their specific knowledge
■ Consistency among the information provided locally is ensured by documentation processes and central review functionalities
■ Cost savings by preparing documentation or documentation elements in house (minimization of consulting costs)
■ Benefit from roll-forward functionalities in TP Data Manager that minimize workload in future periods
Being prepared for audit
Combine central and local knowledge and resources
Efficiency through structured and standardized processes
Risk oriented review and risk management
Realization of cost savings
27© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Centralized web basedTransfer Pricing Documentation
■ Worldwide increasing transfer pricing documentation regulations and compliance burden
■ Growing focus by specially trained tax authorities on transfer pricing
■ Finding a balance in order to be compliant in the area of transfer pricing but limiting the efforts and costs internally
■ Lack to provide evidence during tax audits especially when tax audit covers periods some years ago
■ Having efficient processes to ensure group wide consistent transfer pricing document and reasonable compliance costs
SolutionChallenges
TaxOne Module TaxOne Transfer Pricing Data Manager – Summary
■ Realization of cost savings by preparing Transfer pricing documentation in house and roll-forward functionalities
■ Being prepared for tax audits and reduce risks of penalties and income estimation
■ Preparation of transfer pricing documentation possible within short-time frame due to modular concept
■ Already existing transfer pricing documentation can be stored and submitted to tax authorities immediately
■ Combine central and local knowledge and resources and therefore ensure consistency among the information provided locally
Benefits
TaxOne module TRANSFER PRICING
DATA MANAGER
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Wrap-up and Q&A
29© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Journey to the Tax Function of the Future
Establish the as-is position
Implement effective
technology solutions
Embed efficientprocesses
Deploy the right people
with the right skills
Design the organisational
model
Tax function of the future
Manage risk and create appropriate
KPIs
Develop the tax vision and
policy
Organisational Model
Process and Responsibility
Systems and Technology
Data and Information
People and Capability
Governance and Risk
Performance Management
30© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
Enabling the tax department of the future – key areas
Improving accountability – to clarify the tax department’s roles and responsibilities within the
context of a company-wide, board-approved tax governance framework
Improving standardization – to automate and strengthen tax processes and controls and
ensure all tax compliance obligations are met
Improving connectivity – between the tax department and other business areas so they work together as proactive partners in setting and advancing
business objectives
Thank you!
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