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Confidential and Proprietary
Sensitivity: Confidential 1
Real-Time Reporting in Indirect Tax
18 October 2018
Kim Hau, Thomson Reuters
Dorcas Mbwiti, Thomson Reuters
Confidential and Proprietary
Sensitivity: Confidential 2
Agenda
• Introductions
• Digital Reporting for Indirect Tax Today
• Global
• Europe
• UK
• The impact so far
• Success / Failure for the taxpayer / tax authority
• The journey for future indirect tax compliance
• The health of your data
• The role of technology
• ONESOURCE coverage
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Sensitivity: Confidential 3
Introductions
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Your Presenters
Kim Hau
Senior Proposition Manager
ONESOURCE Indirect Tax
- Over twelve years experience in Indirect Tax
- Trained with Deloitte and graduated in Law
- Experience working with multinational corporations, FS industry in particular
Dorcas Mbwiti
Proposition Analyst
ONESOURCE Indirect Tax
- 2 years experience in digital tax
- Experience in working with large complex data sets
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Digital Reporting for Indirect Tax Today
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DIGITAL REPORTING
DIGITAL SUBMISSION
(API)
DIGITAL / E-AUDIT
(SAF-T, e-accounting)
E-INVOICING
SPED
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Netherlands
➢ Customer, Vendor
and GL data
➢Upon request of
Authority
France ➢FEC
➢SAF-T, upon request
Sweden ➢SIE Audit File
upon request
Germany ➢DGPdU: direct access of
tax payers systems
➢XML data transmission
➢E-Audit, upon request
Singapore
➢ IRAS Audit File (IAF).
Upon request
Malaysia➢GST Audit file (GAF)
➢Purchase, Sales list and
GL data
➢Upon request
Portugal ➢SAF-T
➢Periodic filing and
upon request
Spain ➢Immediate Information
Sharing (SII)
➢Invoices received & issued
➢Daily filing
Hungary ➢Real time: Invoices issued,
➢ direct access with authorities
Czech Republic ➢VAT Control Statement
➢Periodic filing and upon request
Slovakia ➢ VAT Control
Statement
➢Periodic filing and
upon request
UK➢Making Tax Digital (MTD)
Poland ➢SAF-T country (JPK)
➢JPK_VAT: Transactional level
purchases and sales list
➢Multiple structures, x5
➢Monthly filing and upon request
Lithuania ➢SAF-T, (i.Mas)
➢i.SAF: invoices received
& issued, periodic filing
➢i.SAF-T: GL accounts ,
upon request
➢i.VAZ: Consignment
notes + other transport
docs
China ➢Golden Tax System
➢E-Invoicing : Full invoice disclosure,
➢Validation required from authority
before invoice no. Issued
➢Non-audit or SAF-T equivalent
Brazil ➢SPED
➢E-Invoicing: Full invoice
disclosure,
➢Validation required from
authority before invoice
no. Issued
➢Additional tax &
accounting e-bookkeeping
➢Non-audit or SAF-T
equivalent
Mexico ➢CFDI
➢E-Invoicing: Full invoice
disclosure
➢Validation of the system
United Arab
Emirates ➢FTA Audit File
➢VAT and Excise Tax
audit file
➢Simplified SAF-T,
upon request
➢Effective 1st Jan 2018
Italy ➢Quarterly
Returns
Norway
➢ SAF-T, upon
request from 2020
Chile ➢E-Invoicing
Columbia ➢E-Invoicing
Austria ➢SAF-T
upon request
Luxembourg➢SAF-T
upon request
Global View
India➢GSTN Reporting
Italy E-invoicing
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HIGH RISK MEDIUM RISK LOW RISK
Audit Files
Making Tax Digital
E-invoicing
Real – time Reporting
LU PT
BR
UK
FR AU LTPL
DEMX CO
HU ES
GR IT
SG SE MY
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April 2018
• Private Beta
– Started Small
• Public Beta
April 2019
• VAT Registered Business
• Turnover Above VAT Threshold
– Keep Digital Records
– Send VAT Return through Software
9
VAT Timeline
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What is a Digital Link?
Electronic or Digital Transfer
• YES : txt, xml, csv
• NO : Copying and Pasting
• NO : Retyping Data
April 2020…soft landing
• YES : digital links
• NO : record keeping
• NO : submissions
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Obligations
Direct Electronic
Transfer or
Download/Upload
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The Impact So Far
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EU
VAT = 7% EU GDP
€147.1B VAT Gap in the EU
equates to €100 per EU citizen
“I urge Member States to move forward on
the definitive VAT system before the
European Parliament elections in 2019” –
Pierre Moscovici, Commissioner for
Economic and Financial Affairs
Bring down administrative barriers for
companies that trade cross-border (EC Sales
Lists, Instrastats)
UK
£11.7B in 2016-17
Fallen from 12.5% to 8.9%
over 10 years
£3.5B of gap due to mistakes in VAT returns
(2015-16)
BREXIT…
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Uptick of real-time reporting for Tax Authorities
105M PLN ?
Results since SAF-T introduction: Results since SII introduction:
Agencia Tributaria reports that real
results will not be known until
November
> VAT revenues UP 4.5-5% on
average month on month
12.4%
Results since SPED:
Average annual tax revenue increase
from 2010-2014
VAT found in JPK_VAT files from
36,000 different entities relating to
invoices since 2016
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Implications of real-time reporting for the Taxpayer
Faster repayments
Embracing new technology
Journey towards cleaner source data
Opportunity to review country risk &
processes & work collaboratively with other
teams
No lead time to prepare
Increased risk of penalties
Cost to comply
May be reliant on new technologies / 3rd
parties to solve problem = risk control
How can you manage compliance when you don’t know what’s coming next?
Streamline your indirect tax processes
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The Journey for Future Indirect Tax Compliance
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1) Source Systems Map
ERP 1
ERP 2
OTHER VAT RELEVANT
DATA
➢ Map out the source systems and
other systems required for VAT
reporting per jurisdiction
➢ Assess available fields vs
required fields
➢ % of manual adjustment per filing
based on the health of your
source data
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➢Risk assess country by country based on
readiness for real-time reporting
➢Taking into account:
➢ VATable turnover;
➢ level of transactions;
➢ availability of data;
➢ readiness for source system(s) extraction
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2) Country Risk Map
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3) Get it right first time!
- Ensure tax treatment is correct before the transaction happens
- Real-time calculation to attribute the correct tax code to supplies
- Use of a tax engine can help to clean up source data
Rules &
CalculationsERP
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4) Embrace technology
THE TIME IS NOW:
- Tax authorities are going digital, tax functions need to follow suit
- Data mining and analysis tools are getting more sophisticated
IN A TIME OF POLITICAL UNCERTAINTY:
- Software / off-line validation
tools keep tax rules and changes
up to date so you don’t have to
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ONESOURCE Coverage
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ONESOURCE INDIRECT DETERMINATION
Highly accurate
Automation of
AP& AR
Automate all
tax decisions
Tax Research
Content for
180 countries
Support for
complex
transactions
Decouples rate
From tax code
Solve ERP
tax code
challenge
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ONESOURCE INDIRECT COMPLIANCE
OECD recommended format for digital audit support
Submission frequency and mandatory \ on-demand varies
per country
Tax returns. Listings and other filings
Submission frequency and type varies per country
Poland (JPK_VAT) Q2 2018
UAE – Q3 2018
Over 50 countries Includes digital tax reporting – Spain
SII, GCC countries -Q4 2018 \ Q1 2019
Accelerated ‘lite’ content delivery –Q1 2019
Fully MTD compliant from Digital submission of VAT return under new API portal, digital linking of
data from source down to adjustments.
Fully MTD compliant – Q3 2018
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ONESOURCE DIGITAL TAX
OECD recommended format for digital audit support
Submission frequency and mandatory \ on-demand varies
per country
Portugal – Q2 2018
Others based on customer demand \ market priorities –
Poland, Norway, Austria, Luxembourg, Lithuania have
SAF-T obligations
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ONESOURCE Global Audit Manager
➢ Manage global controversies
➢ Drill-down jurisdiction by
jurisdiction
➢ Dashboard view
➢ Record of meetings,
information requests,
correspondence re appeals
➢ Attach relevant information
➢ FOYER - DEMO
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Emerging Tech
1) Application of Machine Learning in Tax
- Learnings based on previous filings
- Learnings based on user steps
- Returning confidence levels based on ontologies
- Pilot for SAF-T PL
2) Knowledge Graphs
- New pilot for Digital Tax?
- Scan upcoming legislation / proposals
- Return application to your organisation
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POLL?
Which of the following would you identify as being the highest priority issue for your organisation
(which is something that we can solve)?
E-invoicing obligations
Submission of Indirect Tax filings (e.g. MTD, e-filing)
Graphical analytics of indirect tax filings (Global heat map / Slice dice of data)
Country expansion of digital tax reporting (audit files, SAF-T)
Expansion into other indirect taxes (e.g. Land fill, excise tax)
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SUMMARY
✓ Examine your upstream compliance &
Get it Right First Time
✓ Explore technology as an enabler
✓Employ a globalised solution where
possible
✓ Undertake an in-house review of your
global tax audit defence readiness
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Thank You