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Transform today for
the challenges of
tomorrow
Plenary
Maison de L’automobile15 December 2015
Andre Claes – Partner, Deloitte BelgiumMark Kennedy – Partner, Deloitte UKPatrick Joucken – Partner, Deloitte Belgium
1
"Everything that can be
invented has been invented”
Charles Holland Duell c1899
US Commissioner of Patents
Transformation?Introduction
"Everything that can be
invented has been invented”
Charles Holland Duell c1899
US Commissioner of Patents
Thomas Watson 1943
President of IBM
Transformation?Introduction
Bill Gates
Chairman and CEO of Microsoft
Transformation?Introduction
"Everything that can be
invented has been invented”
Charles Holland Duell c1899
US Commissioner of Patents
Thomas Watson 1943
President of IBM
“When we set the upper limit of PC-DOS at 640 KB,
we thought nobody would ever need that much memory”
Transformation why? External trends are impacting Tax …
As business GLOBALIZES … so do tax
obligations together with a pressure for
centralized global delivery
TECHNOLOGY proliferation … fuels
expectations for wholesale process
change, and becomes a catalyst for re-
engineering tax
Transformation of REVENUE
AUTHORITIES … the way they go about
their work
Increased REGULATION makes business
more complex but also more transparent
... raising risk and enabling mainstream
media coverage
TALENT … new skills are needed and
there is a new environment within which
to attract and retain people
New STAKEHOLDERS … have emerged
and we are confronted by a new era of
socially responsible tax
• Control powers of tax authorities
• Targeted transfer pricing audits
• Large companies Auditing Centres
• Parliamentary Commission on serious
Fraud
• Generalised electronic filings
• Increased Digital Data requests
• Transparency: exchange of tax rulings
The story so far
9
OECD’s Base Erosion & Profit Shifting study
The European Response
State Aid
Tax Rulings: automated exchange
Action Plan on Corporate Taxation
Unilateral measures
International response
10
• More taxes and more reporting in more jurisdictions
• Evaluate the impact of change on tax operations
• Modelling the impact of new measures
• How? New management processes & tools
• When?
What does it mean?
11
The Global Tax Reset & BEPS
12
Global Tax Reset: the changing world of tax
The Global Tax Reset is bringing in a new era of
international tax, with an emphasis on transparency,
consistency and sharing of information between tax
authorities. This paper discusses the forces driving
significant change to the international tax landscape,
as well as key areas of business impact and
resulting challenges.
About BEPS and FAQs
The OECD’s Base Erosion and Profit Shifting actions
are well underway with proposals and consultations
on all actions. Change is coming. These pages will
help businesses navigate what is happening, key
deadlines and issues they might want to consider.
Articles, briefings and discussion papers
The OECD’s Base Erosion and Profit Shifting actions
are well underway with proposals and consultations
on all actions. Change is coming. These pages will
help businesses navigate what is happening, key
deadlines and issues they might want to consider.
News & updates
Visit Deloitte tax@hands for tax news and updates on
BEPS and other issues driving the global tax reset
Dbriefs webcasts
Dbriefs Webcasts feature our professionals discussing
critical issues that affect your business.
Country-by-country reporting (CbCR)
This perspective paper aggregates frequently asked
questions by business leaders about Country-by-
country reporting (CbCR), a requirement detailed in
Action 13 of the OECD's BEPS guidelines, and is
intended to help companies understand what CbCR
is, what information is needed, who CbCR applies to,
and how businesses can prepare.
BEPS Actions
There are 15 BEPS Actions that are currently being
considered and worked on by the OECD. For each of
the Actions, there are factors to consider such as the
timing, impact and potential impact on policy. The
OECD/G20 has set a number of deadlines to
conclude on the BEPS Actions.
G20/OECD Timeline
An overview of the information and documentation
that has been released by the OECD during the
course of the BEPS Action Plan, together with
relevant Deloitte or third party content and
commentary. As well as containing details of all of
the releases to date, the timeline shows what is
expected over the coming months, in accordance
with the schedule published by the OECD.
Tax transformed – the “professionalisation” of tax
14
People and
organisation
Processes
Systems
Tax Risk Management
Risks
ControlsTest
Report
Tax Policy Framework
Risk
appetite
Decision
making
Control
standards
Oversight
KPIs/KRIsCulture
and
ethics
Accountabilities
Tax Vision, Goals
and StrategyTax Outputs and
Communication
Increasing formalisation of tax policy
16
Accountabilities for taxes getting clearerGroups are increasingly defining their tax policy
Source: Deloitte Global Market Research, 2014
47%
29%
23%No
Yes, for some areas
Yes, for all four areas
Answering key questions
17
People and
organisation
Processes
Systems
Tax Risk Management
Risks
ControlsTest
Report
Tax Policy Framework
Risk
appetite
Decision
making
Control
standards
Oversight
KPIs/KRIsCulture
and
ethics
Accountabilities
Tax Vision, Goals
and StrategyTax Outputs and
Communication
“How is success
measured?”
“How are key
decisions made?”
“Who owns each
tax?”
“What governance
is there over tax?”
Identifying, controlling and reporting tax risks
18
Groups generally have processes for
identifying, controlling and reporting tax risk
More and more third parties have a specific
interest in tax risks and how they are managed
• Tax Authorities – e.g. UK,
Australia, Netherlands, Japan,
Spain
• International bodies – e.g. OECD,
EU Commission
• The Press
• Investors – e.g. Local Authority
Pension Fund Forum
• Analysts – e.g. Schroders, Citi
• Indices – e.g. Dow Jones
Sustainability Index, MSCI World
• NGOs – e.g. Tax Justice Network,
Action AidSource: Deloitte Global Market Research, 2014
Developing a risk-based approach
19
People and
organisation
Processes
Systems
Tax Risk Management
Risks
ControlsTest
Report
Tax Policy Framework
Risk
appetite
Decision
making
Control
standards
Oversight
KPIs/KRIsCulture
and
ethics
Accountabilities
Tax Vision, Goals
and StrategyTax Outputs and
Communication
“How do we report to
the Tax Committee?”
“What are our key
tax risks?”
“Who are our ‘lines
of defence’?”
“When is Internal
Audit testing tax?”
Increasingly centralised decision-making
22
Global tax operating models: past, present and future
Source: Deloitte Global Market Research, 2012 and 2014
Pressure for continuous improvement
23
Satisfaction (% happy) with current model by driver and method
Source: Deloitte Global Market Research, 2014
Evolving the operating model
24
“Do we have the
right scale, roles,
locations?”
“Can we streamline
adjacent
processes?”
“What is the right
in/out/co-source
model?”
People and
organisation
Processes
Systems
Tax Risk Management
Risks
ControlsTest
Report
Tax Policy Framework
Risk
appetite
Decision
making
Control
standards
Oversight
KPIs/KRIsCulture
and
ethics
Accountabilities
Tax Vision, Goals
and StrategyTax Outputs and
Communication
“Can we leverage
our Shared Service
Centres?”
Tax transformation framework
28
Str
ate
gy a
nd
ex
ec
uti
on
Reg
ula
tory
co
mp
lia
nc
e
Cas
h t
ax
an
d p
aym
en
t m
an
ag
em
en
t
Clo
se
, p
rovis
ion
, a
nd
pro
ce
ss
Ta
x b
us
ine
ss
pla
nn
ing
Ris
k a
nd
ta
x c
on
tro
ve
rsy
Global direct tax
Global indirect tax
Accounting for tax (provision) People and
organization
Technologyand systems
Processand policy
Data and information
Enablers
Value drivers
Main points?Conclusion
1. Policy, Risk and Operations
2. Compliance Operating models
3. Technology
Interconnections – Change management – Communication
30
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.
DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see
www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member
firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most
complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte
Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained
by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 32
Transform today
for the challenges
of tomorrow
Operational
Transfer Pricing
1
Maison de L’automobile15 December 2015
Maria Panina – Senior Director, Deloitte BelgiumThierry chaumantin – Senior Manager, Deloitte Belgium
1. Definition
2. Issues & Challenges
3. Solution Framework
4. Implementation & Monitoring – SAP example
5. Summary
Contents
Definition
People, Processes and
Technology employed to
ensure that chosen
business model and
transfer pricing policies are
ultimately reflected in its
books and statutory returns
Transfer pricing policy
Operational TP Monitoring Implementation
Documen-tation
• TP policy not shared within the organization
and / or not properly followed in practice
• Unclear roles and responsibilities: tax team
often not aware of altered IC transactions
• Disconnect between tax department & other
business departments
• A complex and fragmented architecture with
multiple (ERP) systems
• A wide variety of GAAP and accounting
systems
→ No standardized chart of accounts
• Reliance on a large number of spreadsheets
(highly manual, prone to error)
• No possibility to split P/L per function / profit
center / transaction / ...
• Inconsistent definitions of P/L elements
• Limited ability to monitor and adjust global
pricing on a monthly or quarterly basis
→ Substantial year-end adjustments (creates
awareness at the level of the authorities)
• Potential impact on tax (management), both
direct taxes as well as indirect taxes
Issues & Challenges
Technology
Process
People
Data collection is
complete and
accurate
Policies are
properly translated
into practice
Calculations and
adjustments are
automated and accurate
Audit status is visible
on a global basis
Reporting and
requirements are identified
and fulfilled locally
Policy or calculation
changes effected on a
timely basis
How do you get there – some key considerations?
• Who are the people involved in process – are they the optimum people; do they understand their part
in the process?
• Do those involved have clearly defined roles and responsibilities?
• How are training and legislative updates handled?
• Are key responsibilities understood and allocated to the right people?
• How frequently would the business like the calculation/true-up process to be run in an ideal situation
(as part of each month end close / quarterly / bi-annually / annually)?
• Where should the different elements of the end-to-end process be run (usually Finance/Tax/Business
split)?
• What controls should be in place to counter key risks? How are the controls going to be monitored?
• What technology is used currently to support the people and processes?
• How suitable is that for the complexity and / or risks of transfer pricing within the business?
• Have all technology options been considered given the significant advances in recent years?
• What level of automation is optimum for the business?
Priorities
Solution Framework – Key considerations
People: Clear definition of Roles & Responsibilities
• TP policy design
• TP documentation
• TP policy defence
• Financial reporting to Tax
• MIS reporting to Business
• Legal entity reporting
• Implementation
• Data gathering
• Monitoring
• Identifying changes of facts
TP Policy Implementation
processMonitoring Documentation
Tax
Finance
Business
Operations
Legal
Treasury
IT
Board
Budgets:Segmentation by products,
flows and legal entities
Available financial data may be insufficiently segmentedTP policies
Calculation of
Adjustments
Adjustments need to be
allocated across multiple cost
centers or SKUs
Price lists: 1000s SKUs
and discounts
Statutory results
Adjustments need to reflected in statutory financials so results correspond to the TP policy
Update of budgets
Automation
Processes (and data) - Implementation
Considerations
• Indirect Tax & Customs Valuations on
individual product invoices.
• WHT implications of a true-up
payment not linked to specific product
invoices.
• Resources and system capability
required to undertake the adjustment.
• Acceptance of lighter-touch process
in certain jurisdictions.
Processes– Monitoring
Adjusting books before year end close is a critical component of ensuring
compliance
A combination of SAP modules can be used to effectively implement and monitor
the TP policy
BPC: Budgeting Module - Determine transfer price by product
family based on budget P&L and target Profit Level Indicators
(PLIs)
SD: Pricing Module – Configure transfer price by product
family using appropriate TP mechanism (e.g. cost plus, re-sale
minus) and generate intercompany billing invoices
FICO (COPA): Controlling Module – Analyse PLI variances and
determine transfer price corrections (TP true up adjustments or
transfer price update)
TP policy: implementation & monitoring on SAP
Steering PLI according to TP Policy on SAP
• These 4 steps will help you to
dynamically steer the PLIs (e.g. OM,
NCP) within the fiscal year according to
the TP policy via:
• Accurate determination of Transfer
Price by product family at Budget time
• Adequate implementation of TP
mechanism (e.g. cost plus for
manufacturer, re-sale minus of
distributor) at invoicing time
• Dynamic re-calculation of transfer
price based on actuals & re-
forecasted numbers at Quarter Close
time© 2015 Deloitte Belgium 14
Pricing setupSAP SD
Budgeting solutione.g. SAP BPC
Profitabilityanalysis
SAP CO-PASales orderprocessing
SAP SD
Per
product
family
1 2
34
1.Budgeting & Transfer Price Determination
• Budget input
During the budget exercise, OPEX, sales
and cost of sales quantities and prices
will be loaded in the system by the
business teams
• PLI computation
Based on the data entered, the
budgeting tool will compute the PLIs by
legal entity/function
• Transfer Price margin calculation
PLI can be iteratively refined by adjusting
the percentages in the budget tool (cost
plus, re-sale minus) to reach the target
PLI (OM,NCP) by legal entity/function© 2015 Deloitte Belgium 15
Pricing setupSAP SD
Budgeting solutione.g. SAP BPC
Profitabilityanalysis
SAP CO-PASales orderprocessing
SAP SD
Per
product
family
1
2.Transfer Price Configuration
• Standard costs and list prices
Standard costs and list prices are stored
per product (and e.g. customer)
• Transfer price margins
Each transfer price margin (cost plus %,
re-sale minus %) will be stored per
product family/period as a pricing
condition
• Pricing procedure (TP mechanism)
Pricing procedures are defined to apply
TP mechanism (e.g. intercompany cost
plus % on standard cost or intercompany
re-sale minus on list price)
© 2015 Deloitte Belgium 16
Pricing setupSAP SD
Budgeting solutione.g. SAP BPC
Profitabilityanalysis
SAP CO-PASales orderprocessing
SAP SD
Per
product
family
2
3.Intercompany invoicing
• Intercompany invoices can be
automatically generated according to the
TP mechanism (pricing procedures) defined
• Dynamic calculation – unit price
variation
The pricing procedure can take into
account variation in unit price such as:
• Change to the list price
• Customer discount
• Inventory valuation (e.g. flash title sales
vs. sales from distributor replenishment
stocks) © 2015 Deloitte Belgium 17
Pricing setupSAP SD
Budgeting solutione.g. SAP BPC
Profitabilityanalysis
SAP CO-PASales orderprocessing
SAP SD
Per
product
family
3
4. Transfer Price Controlling (*)
• Analyze Actual PLI (OM, NCP) by segmented
P&L (legal entity/function)
Compare actual vs. budget, break-down GM by
product family, identify variance origin (volume,
unit price)
• Determine Transfer Price adjustment
Combine actual YTD plus remainder of the year
forecasts. Determine transfer price adjustment
by product family (% of cost plus or re-sale
minus) to reach target PLI for the fiscal year
• Implement Transfer Price adjustment
Either via transfer price update in SD (adjust %
of cost plus or re-sale minus) or via posting of
TP true-up adjustments (generate credit
note/debit note)© 2015 Deloitte Belgium 18
(*) Combined usage of COPA & BPC to get full picture
actual & budget/forecast numbers
Pricing setupSAP SD
Budgeting solutione.g. SAP BPC
Profitabilityanalysis
SAP CO-PASales orderprocessing
SAP SD
Per
product
family
4
Operational TP on SAP – Key considerations
• Budgeting module does not need to be
SAP BPC
Other budgeting tools like Oracle Hyperion,
IBM Cognos TM1, Anaplan can also support
this process.
• TP on services (cost re-charges) can be
addressed in a similar manner
Allocation table in the budgeting system
and/or SAP FICO. To apply allocation drivers
to cost centers.
• Transfer price update & forecast process
Updating transfer price on pricing module
during fiscal year to reach target PLI based on
the actuals and the updated forecast
© 2015 Deloitte Belgium 19
Pricing setupSAP SD
Budgeting solutione.g. SAP BPC
Profitabilityanalysis
SAP CO-PASales orderprocessing
SAP SD
Per
product
family
Solution Framework- The Building Blocks
Master File
Legal structure, business
area, intangibles, financial
activities, financial & tax info
Local Files
Local mgmt. info, org chart,
intra-group payments,
financial data for arms
length calcs., APAs
Operational Transfer Pricing
Tax FinanceSupply
ChainLegal
Other
Board, IA
People
Organisation
Stakeholders
Process
Technology
Systems
and data
1.
3.
2. ITTreasury
Risk, controls and governance
Strategic objective
setting
Workflow
Reporting
• Country by country
reporting
• Tax return information
• Internal stakeholders
Analytics and
monitoring
• Validation of policy
operation
• Value-added analytics
and insight
Policy determination
Policy documentation
Audit defence
• Audit defence
approach
• Process / workflow
• Feedback and update
Economic analysis and initial
documentation
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication is for internal distribution and use only among personnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related entities (collectively, the “Deloitte Network“). None of the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 22
Transform today for
the challenges of
tomorrow
The new Union
Customs Code
Maison de L’automobile15 December 2015
Dries Bertrand – Senior Manager - Deloitte BelgiumAlexander Baert – Attorney-at-law - Laga
1
Introduction
Introduction of Union Customs Code / Transformation – why?
How does this impact your GTM systems & tools / Transformation – what?
Transform today for the challenges of tomorrow – how?
Conclusion
Contents
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 2
From CCC to MCC to……UCC
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 4
• Community Customs Code (CCC) and its Implementing Provisions (CCCIP)
• Regulation 2913/1992
• Regulation 2454/1993
• Modernised Customs Code (MCC)
• Regulation 450/2008
• Goals: Rationalisation, Standardisation, Simplification, Computerisation, Interoperability,
New facilities.
• The Union Customs Code (UCC) package
• Regulation 952/2013
• Delegated Act – approved by the EU Council and Parliament
• Implementing Act – under discussion
• Publication of both acts expected in the Official Journal in
December 2015
• Entry into force 1 May 2016 and full implementation, using all
simplifications and IT applications by the end of 2020
Aim of the UCC
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 5
Facilitation of legitimate trade
Reinforced need to ensure security and safety
Paperless environment for customs & trade
Harmonized & standardized application of customs controls
UCC will modernize
customs and is the
new framework on
the rules and
procedures for
customs throughout
the EU
General overview of potential impact of the UCCAuthorized Economic Operator
Classification
Origin
Customs ValueCustoms Debt &
Guarantees
Customs Regimes
Simplifications & IT environment
UNION CUSTOMS CODE
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 6
© 2015 Deloitte. Private and confidential.
UCC Projects Timeline
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 7
UCC Projects related to electronic systemsTarget date of
deployment
S1
2017
S2
2017
S1
2018
S2
2018
S1
2019
S2
2019
S1
2020
S2
2020
1. UCC Registered Exporter System (REX) 01.01.2017
2. UCC Binding Tariff Information System (BTI) Update - Phase 1 01.03.2017
2. UCC Binding Tariff Information System (BTI) Update - Phase 2 01.10.2018
3. UCC Customs Decisions 02.10.2017
4. Direct trader access to European Information Systems
(Uniform user management & digital signature)02.10.2017
5. UCC Proof of Union Status (PoUS) 02.10.2017
6. UCC AEO updates 01.03.2018
7. UCC New Computerised Transit System (NCTS) update 01.10.2018
8. UCC Surveillance 3 02.10.2018
9. UCC Automated Export System (AES) 01.03.2019
10. UCC Information Sheets (INF) for Special Procedures 01.10.2019
11. UCC Special Procedures 01.10.2019
12. UCC Notification of arrival, presentation notification and
temporary storage02.03.2020
13. UCC Centralised Clearance for Import (CCI) 02.10.2020
14. UCC Guarantee Management 02.10.2020
15. UCC Safety and Security and Risk Management TBD
16. UCC Classification (CLASS) TBD
Staged
approach of
implementing IT
projects /
solutions
Example of potential impact of the UCC
EUROPEAN UNION/SWITZERLAND
India
3. Origin (BOI)
2. Classification (BTI)
I
ME
X
4. Customs Value
5. Customs Clearance
6. Customs
Debt
7. Special Procedures
USA
8. Simplifications and IT
systems
1. Authorized Economic Operator
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 9
Customs & Global Trade IT processes
CGT processes need to mapped, put in SOPS and build into technology. The complexity with customs & global trade
processes is the ‘real time’ transactional match between financial data and logistics data where content constantly
needs to be up to date. Economic operators lack such environment and have no or limited governance models in place
10
Conversion
provider
ERP
(SAP ECC6)
Feeder
Systems• Sales and Distribution
• Materials
Management
• Logistics Execution
• …
Au
tho
rities
Cu
sto
ms
/VA
T/S
tati
stic
al…
GTM technology
Master
Data
Master Data*
Trans. Data
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015
Global trade master data – UCC impact
11D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015
Master Data Management
Business Partner
Customers
ProductBill Of
Material
Product data
Banks
Duty RatesBOM
Exchange Rates
Customs codes (HTS/CN Code)
Licenses
Import/Export Licenses
Vendors
Rates
Economical Origin
Preferential Status
License Rules
Letter of Credit
Classification
Origin
SPL List
Export Control Codes
(ECCN/ECN/ ITAR)
ERP
ERP/Global Trade
Global Trade
Product values
Global trade functionalities – UCC impact
12D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015
Excise warehousing
FTZ/ Bonded
warehousing
Customs
Processing
Brokerage / e-filing
declaration model
Product
Classification
Product
Classification
Export License
Screening
Import License
Screening
Embargo
Screening
Black List
Screening
Certificate
Management
Preference
Determination
Supplier Declaration
Handling
Letter of Credit
Intrastat reporting
Country of Origin
OGA management
Regulatory
management
Customs
management
Special
regimesPreference
management
Other trade
compliance
Duty Drawback
The Four Keystones of CGT management
13D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015
Processes & Procedures• Service provider management• Customs filing• Applying for licenses• License reporting• Agreements reporting• Mergers and acquisitions advisory• End-use research and assurance management• Anti-boycott research and assurance
management• Training
People & Organization• Leadership and commitment• Policies definition and management• Culture of awareness• Global regulatory knowledge• Regional regulatory knowledge• Technical regulatory knowledge• Systems and tools proficiency• Cross functional collaboration
Technology• Restricted party screening• Embargo screening• End-use screening• Anti-boycott screening• Classification management• License management• Free Trade Agreements management• Import/Export filing• Trade document generation• Broker integration• Records retention• Metrics and reporting• Workflow and rules
Data Management • Master data management• Data quality management• Global trade content• Restricted parties/entities• Embargo lists• Classification data• Systems role definitions• Data tagging• Data access policy management• Metrics and reportingTechnology
Processes
&
Procedures
People &
Organization
Data
Management
Summary – Points of attention
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 15
01
02
03
04
05 Internal and external processes and relationships are in
scope
Processes will need to be reconsidered from a financial
point of view
Compliance procedures will need to be reassessed
Master data will need to be reassessed
Only 6 months to go to have a number of key processes,
authorizations, systems and control changes in place
What do you need to do?
• 1 May 2016 will be here soon
• A thorough assessment of the
impact of the UCC is necessary
• A project plan & strict timeline
must be drafted in order to
implement the changes of the
UCC in a strict and concise way
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 16
Way forward
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 17
Unlocking the
potentials of the UCC
while being/growing
compliant
UCC
OPPORTUNITY
SPOTTING /
RISK
MITIGATION
AWARENESS
&TRAINING
ADAPTING PROCESSES &
PROCEDURES
Thank you
Q & A
D. Bertrand & A. Baert - The new Union Customs Code requires new system changes - TMC Conference - 24 November 2015 18
Fernand Rutten, Partner, Customs & Global Trade, Global lead, +32 2 600 66 06 or [email protected]
Dries Bertrand, Customs & Global Trade, Senior Manager, +32 2 600 66 76, [email protected]
Alexander Baert, Attorney-at-law, Laga, +32 2 800 71 51 or [email protected]
Transform today
for the challenges
of tomorrow
Centralized VAT
compliance
Christophe De Waele - Deloitte
Sabine Boone – Deloitte
1
• The Current Landscape
• The Push to Centralisation
• Components of Compliance
• Focus on Technology : The SMART example
• Executing on strategy
Contents
In Deloitte’s 2014 indirect tax client
survey, our clients identified indirect tax
compliance as their number 1 priority
area.
Only 30% of respondents to our global
compliance survey were happy that their
centralised compliance processes were
efficient.
Pressures on indirect tax teams
VAT is a big number
Imposed risk managementregimes such as SAO
Public scrutiny and boardroom attention
Behaviour-based penalty regimes
Desire to “do more” withthe same resources
New resourcing and deliverymodels, such as SSC/GBS
Increasingscope of‘indirect’
taxes
More to manage alongside greater scrutiny over performance and compliance
The tax
team
Operating model evolutionThe evolution of compliance strategy from discrete functional-
and country-based models to integrated, global and cross functional services
Limited automation Medium automation
Sharing of tools and processes
Global
Maximum automation
One function Multi-function
Little sharing Full integrationCo-location
Transactional and advisory
Local Regional
Two to three functions
Transactional
SSC geographical scope
Degree of automation
Functional scope
Degree of functional integration
Degree ofvalue add
Outsourcing model Decentralized Coordinated, consolidated Centralized, Integrated
Prepared by separate local country teams
With ad-hoc use of advisors on country by country basis
Tax and statutory accounts processes aligned
Co-ordinated global outsource working with SSC
Shared service team prepares tax returns and statutory accounts
Local support for quality assurance and specialist input
Tax and statutory accounts
Operating model
Market research - Compliance focus
Relative importance of factors in %
Current global compliance drivers for organisations and their management
* Global CRS Transformation survey conducted by Deloitte – December 2014
Market research - Compliance focus
(% Happy)
Satisfaction with the current model for managing global compliance
Delivered and
managed locally
Delivered locally,
managed centrally
Delivered and
managed
centrally
Method 1
Decentralised
Method 2
Co-ordinated
Method 3
Centralised
Market research - Compliance focus
21% 14%7% 5%
Indirect taxreturns and payments
Global taxprovision
Statutoryaccounts
Corporate incometax returns and payments
Specific issues…
Does not perform as well for…
• Lack of control; monitoring; management
• Complications of local knowledge
• No central strategy
• Lack of control; monitoring; management
• Lack of communication from external partners
• Lack of skills/ expertise
• Lack of control; monitoring; management
• Less focus on these areas
• Problems with data collection/ integration
• Lack of control; monitoring; management
• Lack of communication from external partners
• No central strategy
• Lack of skills/ expertise
Satisfaction with the current model for managing global compliance
Market research - Key messages
• More centralised operating models
being deployed but the degree of
‘enthusiasm’ varies by process
• Increased use of selective outsourcing to
complement the in-house team and as a
catalyst for wider improvement or even
transformation
• The focus is now on more consistent
global processes and quicker, simpler
delivery, often through the better use of
technology
The components of centralising compliance
People Knowledge Processes Technology
Local expertise
Centralisation of compliance
The right mix of people
An multi-disciplinary team comprising:
• Tax technical specialists
• Data management resources
• IT and Excel skillsets
• Accounting knowledge
• Project & Process managers and owners
• 3rd party providers where appropriate
Nationalities Skill sets
The right mix of talents to consolidate and
test data, submit returns, adapt systems
and handle relationships with wider
business and local tax authorities
PeoplePeople
Knowledge is a key to success
Periodical Newsletters
Strong Tax technical knowledgePractical “problem solving”
experience
Innovative EMEA Tax tools
EMEA Tax matrix and overviews
Updated tax Information per country
Expertise
Co
mb
inatio
n o
fS
up
po
rted
by
Perio
dic
al
ou
tpu
t
Continuous professional training
Regular updates of knowledge databases
Knowledge
Knowledge
Reliable processesProcesses
Processes• Important to recognise what
‘compliance’ encompasses
• Preparing the return is a single step in the
cycle
• Centralising compliance will surface pain
points that need to be addressed
• We’re becoming more adept at segmenting
and aligning steps across processes
• Styles of process improvement look different
across businesses but key steps are often
common
Technology trends
• VAT compliance technology market still evolving:
− The number of international solution providers is increasing: with an eye on
making the most of an under exploited market.
− Differing views on how much integration with the source financial systems is
needed
− Still a lot of excel automation being offered in the market
− No solution does it all… yet
• Underpinning technology solutions are supporting more flexible approaches to
delivery. Clients deciding how much Indirect Tax compliance they want to share
with a service provider will replace the ‘binary’ in house vs. outsource decision.
• The systems for managing the tax process, KPI data and document
management are becoming ‘standard’ in many Tax functions, but adoption and
approach vary from group to group.
ProcessesTechnology
© 2015 Deloitte
Why SMART?
Data
Collection
Data
Validation
Data
Processing
Deliverables
Preparation
Review &
Sign off
Submission
& Archiving
Management
ReportingPlanning
Centralized approach to compliance
SMART as an enabler to standardization and centralization of compliance
20030 are large outsourcing accounts
covering Europe and the globe
+
CLIENTS 160+
EMPLOYEES
Including people of16 different
nationalities
43,000+
INDIRECT TAX RETURNS PER YEAR
ISAE 3402certified
(former SAS 70)
Deloitte centralized approach to Pan European compliance…
Limited standardization & automation,
higher risks, and lack of control
Global operating models
Numerous data sources
Data integrity
Variance in data quality
…leading to challenges
Return
generatorManual entry
in e-filing
software
Semi automated tools Semi automated
toolsExcel review
sheets
VAT cube
Manual checks and adjustments
Excel reports
Excel
tracker SMART: automated processing application
© 2015 Deloitte
Reporting requirements
SMART is an application developed by Deloitte that bridges the gap between
companies’ ERP systems and their global indirect tax reporting obligations.
Company data sources
ERP
Legacy Systems
DWH
ITX returns
Listings Reports
End-to-end Indirect Tax Compliance Solution
SMART key features
• Flexible set-up
• Data cleansing and consolidation
• 35+ Quality checks
• Ready-to-file ITX returns
• Full audit trail
• Standard management reporting
Flat files
What is SMART?
Consider VAT’s position within the wider business
Identify your key stakeholders and determine how to work with them
Take stock of what technology solutions are already available in the GBS and across your tax groups: you may have more to play with than you expect
Focus on complementing and improving current processesrather than disrupting them
Don’t overcomplicate things: it puts adoption of change at risk
Technology is not a ‘silver bullet’. Sustainable improvement takes careand effort
There’s more than one route to ‘best in class’
Executing your strategy
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication is for internal distribution and use only among personnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related entities (collectively, the “Deloitte Network“). None of the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 23
Transform today for
the challenges of
tomorrow
The hidden
challenges of country-
by-country reporting
Maison de L’automobile15 December 2015
Lucas Yüksel – Director, Deloitte BelgiumMourad Chatar – Senior Manager, Deloitte Belgium
1
1. Introduction
2. Global tax reset
3. What are the new requirements?
4. How to get prepared ?
5. Conclusion
Contents
1. Introduction
4
Tax & Legal Risk
Management
Volatile economic
environment
Increased complexity of
legislation
More vigilant tax
authorities
Globalized business models
Technology challenges
Customers / Suppliers
Media / NGO’s /
Lobbyists
OECD / BEPS
EU / Anti-abuse
National tax
authorities
Share holders /
Boardroom
CFO / Tax Dir / Staff
New stakeholders in the tax landscape The perception of tax avoidance has
become a reputational risk
Feb 2013 July 2013
G20 leaders meet
“Addressing Base
Erosion and Profit
Shifting” published
• Digital economy
• Hybrid mismatches
• Harmful tax practices – phase 1
• Treaty abuse
• Intangibles
• Transfer pricing documentation
• Multilateral instrument – phase 1
• CFC rules
• Permanent establishments
• Interest deductions – phase 1
• Harmful tax practices – phase 2
• Risk and capital, other high-risk
transactions
• Disclosure of aggressive tax planning
• Dispute resolution
• Data collection and analysis measuring
BEPS
• Interest deductions – phase 2
• Harmful tax practices – phase 3
• Multilateral instrument – phase 2
September 2014 September 2015 December 2015
Late 2013Early 2014
Discussion drafts, public
comments, public consultations
on 2014 deliverables
Action Plan delivered to G20 Finance Ministers
November 2012
6
2. Global tax resetBEPS Actions Related to Transfer Pricing
Example of Unilateral Measures
Anti-hybrid rules introduced and proposals are discussed in the digital area
Announced reform of the corporate tax system to align on international tax law
Legislation on the double Irish Tax structure applicable since 1/1/15 with a 6-
year transitional arrangement.
Law dealing with cross-border transactions incl. advertising industry &
digital economy enacted
Introduction of the tax on diverted profits. Applicable as from 1/4/158
2. Global tax reset
10
Filing of the 1st
CbC
Action 13: timing 1st CbC reporting
2016 2017 2018
Preparation of
the 1st CbC
Transmission of the 1st CbC
to concerned tax authorities
Next steps
• Adoption of new documentation requirements in domestic legislations;
• Creation of a centralized exchange platform for tax authorities;
• Formal signing ceremony of MCAA (January 2016).
• 2020 ?
2. Global tax reset
Article 6 of the proposed Model Legislation
Country tax administrations should use the report to:
- Assessing high level Transfer Pricing Risks where “effective risk assessment becomes an
essential prerequisite for a focused and resource-efficient tax audit”
- Assess other Base Erosion and Profit Shifting risks in country
Transfer Pricing adjustments imposed by country tax administration shall not be based on CBC
reports: “Country by Country report on its own does not constitute conclusive evidence that
transfer pricings are or are not appropriate”
11
2. Global tax resetAction 13: Country-by-Country reporting implementation package
12
Already implemented /
Implementation in progress
Expected to implement
Hard to predict
Current view on CbC implementation
Further to the release of final report on Action 13, the three-tier documentation package is designed to be implemented via
changes in domestic law by the end of 2016.
2. Global tax reset
3. What are the new requirements?BEPS-driven structure of transfer pricing documentation
14© 2015 Deloitte Belgium
Implementation framework
Timeline
Threshold
• Country-by-Country reporting to be filed from for fiscal years beginning
on or after 1 January 2016. First report due in 2017.
• Filing no later than 12 months after the last day of the Reporting Fiscal
Year of the MNE Group.
• Country-by-Country reporting would be required for MNEs with
revenues above 750 million Euro.
Filing &
information
exchange
• Jurisdictions should require CbC reporting from ultimate parent entities
of MNE groups resident in their country.
• Automatic information exchange with the relevant qualifying
jurisdictions in which the MNE group operates.
• Emphasis on the need to protect confidentiality of the tax information.15
3. What are the new requirements?
Notification
obligation
• Any Constituent shall notify the tax authority of its tax residence
country whether it is the Ultimate Parent Entity or Surrogate Parent
Entity who files the CBC Report
• If the Constituent is not the Ultimate Parent or Surrogate UP, it shall
report the identification and address of the UP or SUP.
Reporting
Entity
• Ultimate parent of MNE groups or
• Another Constituent of the MNE when the ultimate parent is located
in a country not having a Qualified Competent Authority Agreement
or is in Systemic Failure
• MNE may chose another Constituent Entity to file the CBC
16
Implementation framework
3. What are the new requirements?
Content CbC reporting
17
Overview of allocation of income, tax and
business activities by tax jurisdiction
List of constituent legal entities
and business activities by tax
jurisdiction
Additional information to facilitate
understanding (*)
1
2
3
(*) Source of data, FX rates applied,…
3. What are the new requirements?
1. Overview of allocation of income, tax and business activities by tax jurisdiction
18
3. What are the new requirements?
2. List of constituent legal entities and business activities by tax jurisdiction
19
3. What are the new requirements?
Allocation of income, tax & business activities
(*) excludes cash & cash related
Overview of allocation of income,
tax and business activities by tax
jurisdiction
1
Balances
Stated Capital
Cumulated Earnings
Tangible Assets(*)
B/S
P
&
L
Profit/Loss Before Tax
External Revenue
Intercompany Revenue
Current Tax Expense
Item Income Tax Paid#
HR Data
Number of Employees
Transaction
20
3. What are the new requirements?
Different operating possibilities
22© 2015 Deloitte Belgium
Insource
• Potential lack of
expert knowledge
• Potentially more
expensive
• Risk of other
priorities
Outsource
• Access to expert
knowledge and
network
• Free up in-house
resources
• Customised
solutions
• Consistent and
proven approach
Co-source
• Access to expert
knowledge and
network
• Integrated approach
4. How to get prepared?
COLLECT FINANCIAL DATA CENTRALLY IN MGMT. GAAP FORMAT
+ less time consuming data collection process
- need to reconcile CbC data with local filings
Data collection strategy: Local Vs. Central
COLLECT FINANCIAL DATA LOCALLY IN LOCAL GAAP FORMAT
+ no need to reconcile CbC reporting with local filings
- time consuming data collection process
23
4. How to get prepared ?
Identifying & extracting the right financial data source
Which System to use?
Accounting System
(ERP) SAP ECC
Oracle EBS
PeopleSoft
JD Edwards
Other…
Consolidation System
(EPM)
BPC
HFM
Cognos Controller
Other…
DataWarehouse
(BI)
BW
OBIEE
Cognos TM1
..
Number of System Instances
Granularity of Chart of Account
“Legal Entity” Dimension
Point of attentions
24
4. How to get prepared ?
Leveraging on an end-to-end statutory compliance process
• Calendar of
internal and legal
due dates
• Provide data
• Business information update • Clarify/confirm ad hoc matters• Review and
approve• Submit
Financial
Statements
and CIT return• Review of Financial Statements
and equity
• Review LTP, CITR
• Review and agree
calendar
• Governance and
process
• Upload TB’s
• Update mapping
• Upload integrated PBC data
• Check completion of PBC
• Conduct integrity checks
• Identify, prepare and document
Mgmt to Local GAAP and tax
adjustments
• Preparation of local GAAP TB,
Financial Statements and equity
reconciliation
• Prepare LTP, CITR
• Store on
Deloitte Tax
Insight
• Data analytics
Client
Deloitte
Local
Team
Deloitte
Central
Supporting
Technology
Deloitte Conversion Tool (DCT)
E-filing software
Data Collection Data ValidationData
Processing
Deliverable
Drafting
Review & Sign
off
Submit &
Archive
Mgmt.
Reporting
Process
Planning
CBC reporting Tool
Integrate CBC additional data
points in PBCs:
- Tax Cash
- Income by party
(IC/external)
Review
CBC & TP
ratios
Consolidate
CBC report
26
4. How to get prepared ?
26
CDX
CDX+
Te
ch
no
log
ical M
atu
rity
Functional Capabilities
Important note regarding attest clients: Neither CbC Digital Exchange (CDX) nor CDX+ (TMC tool) have been
approved for use by Restricted Entity Clients. Consult a QRM before discussing with a Restricted Entity.
Technology : Deloitte CbC reporting solutions
• Multiple ERP or
no ERP
• No dual GAAP
capabilities in
system or not
maintained /
used currently
• No uniform
Statutory
Accounts
Process /
System (Excel
based
adjustments)
4. How to get prepared ?
© 2015 Deloitte Belgium
Ratio 1 – Accumulated earnings vs Assets
As one can observe, CbC reporting eases the identification of tax / profit
discrepancies among Group (per country) from a high-level perspective.
CbC first experiencesTaxpayer: case 2
28
© 2015 Deloitte Belgium
As one can observe, CbC reporting eases the identification of
substance / profit discrepancies among Group (per country)
from a high-level perspective.
Ratio 1 – Profit before tax vs Employees
CbC first experiencesTaxpayer: case 2
29
29
Technology: Deloitte CDX / CDX+ - Live Demo
CDX: Data Collection - TP Ratios
4. How to get prepared ?
30
Technology: Deloitte CDX / CDX+ - Live Demo
CDX+: Audit Trail to Financial Systems - IFRS to Stat Rec - TP Ratios
4. How to get prepared ?
Key considerations to address in a CBC discussion
Risk Management
What/Where are the Group “material” legal entities?
25
5. Conclusion
Tax Audit Readiness
Can the main statutory differences be explained?
Opportunity
What else can be done with “CbC-like” data?
5. Conclusion
1. Setting of risk objectives
2. A risk mitigation strategy
3. Transformation of processes
4. Implementation of adequate Technology
33
CbC readiness requires
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.
DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see
www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member
firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most
complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte
Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained
by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 34
Transform today for the
challenges of tomorrow
Electronic tax audits:
Trends, risks and
approaches
1
Maison de L’automobile
15 December 2015
Rainer Eismayr – Director, Deloitte Germany
Pieter Van Dyck – Manager, Deloitte Belgium
Market trends & SAF-T in general
eAudits across Europe
Our approach & typical challenges
eAudit in Germany: deep dive & case study
eAudit in France: deep dive & case study
eAudit & your organisation
Contents
E-Data requirements
Common IT & ERP Landscape
ERP
Apportionment
Manual data
Depreciation
ERP
ERP
L1 L2
Financial systems
Main ERP
Legacy
Other
Extra
ct
Tra
nsfo
rmL
oa
d
Tax data warehouse
Transactions
data store
General ledger
data
Adjustments
data
Results data
Documentation
management
Tax compliance and assurance system
Tax desktop
Tax process management
Tax forms
Provision reports
Ad hoc reports
Reporting
and fillings
Reporting
and fillings
Analysis,
calculation,
adjustments
Income
Tax software
Tax provision
software
Sales/use tax
software
Analysis,
calculation,
adjustments
E-Data requirements
Available Data
TP documentation
Country-by-country
reporting
Electronic data access during
tax audit (comparable to
SAF-T)
Bank dataReporting data
Other data
Tax Authority
Risk Monitoring
and Management
Systems
Tax return data, E-Tax Balance Sheets, XBRL
E-Data requirements - Annual data mining
I. Master Data Tax Code
Accounts
Payable
Accounts
Receivable
Transfer
Pricing
II. Tax
Determination
III. Tax Reporting
Sales and Use Tax
Excise Tax
Customs
IFRS
Cross border reporting
Hidden data Known output
SAF-T
Periodically per legal entity• General ledger
• Accounts payable
• Accounts receivable
• Fixed assets
• Inventory
SAF-T: General
Several audit domains:
• VAT
• CIT
• Transfer pricing
• …
Master data
Trans-action
Balances
9
eAudit across Europe
Priority 1 countries
Portugal
France
Luxembourg
Germany
Hungary (2016)
Poland (mid 2016)
Priority 1
eAudit across Europe
Priority 2 & 3 countries
• Austria
• Belgium
• Finland
• Ireland
• Spain
• UK
• Czech Rep
• Denmark
• Netherlands
• Norway
• Slovenia
• Sweden
• Switzerland
• Bulgaria
• Cyprus
• Greece
• Italy
• Latvia
• Lithuania
• Malta
• Romania
Priority 2
Medium
Priority 3
Low
eAudit across Europe
Different levels of complexity & likelihood
Luxembourg
France Germany
• Any tax audit
• Local GAAP
• Exemptions for FSI
• SAF-T Lite
• At discretion of tax auditor
• All tax relevant data
• Scope of requested data can vary
Lik
elih
oo
d
High
Low
ComplexityLess data More data
Technology Organisatio
n
Step 5
Analyze
> Review
significant
Business
event for the
period
> Review
Accounting
systems
landscape
> Review tax
audit history
Extract
Extract the tax
relevant data
from the ERP
system.
Tax relevant
data depends
on the
jurisdiction
Complement
Add relevant
working
documents:
> GAAP to
Stat
conversion file
> VAT
computation
Reconcile
Reconcile tax
eAudit file
with working
documents
Format
Format Tax
eAudit File
according to
local
requirements
Explain
Prepare
explanatory
notes
regarding the
various data
sets (eAudit
File, working
documents,..)
Archive
Store tax
eAudit Files,
Supporting
Documents &
Explanatory
notes on a
CD/DVD/Hard
drive
Step 6 Step 7Step 4Step 3Step 2Step 1
Our approach
Typical challenges
14
Data Extraction
• Balances & transaction
• Extracted data & local financial statement/CIT return/VAT return
• What about large amount of transactional data?
• …
Data Reconciliation
• Format of the tax eAudit file
• Explanatory notes
• Language difficulties
• …
Data Formatting
• What data?
• How to extract it?
• What about complex IT infrastructure?
• …
eAudit in Germany
Introduction
The rules governing the powers of the tax authorities are set out in detail in the German
Principles of electronic archiving of accounting and tax information, Data Access and the
Auditability of Digital Records (“GoBD”).
These rules define 3 levels of data access
• Direct (Z1)
• Indirect (Z2)
• eAudit file (Z3)
The eAudit file needs to contain all tax relevant data. German tax legislation does not provide
formal specifications regarding form & content of the tax eAudit data file.
Most commonly resquested data
eAudit in Germany
17
Master Data GL Account GL Account Number, GL Account Description and GL account class
Master Data Customer Master Customer ID, Customer Name, Customer Country and Customer VAT Number
Master Data Vendor Master Vendor ID, Vendor Name, Vendor Country and Vendor VAT number
Master Data Tax Code Tax Code ID and Tax Code description
Master Data Journal Category Journal Code, Journal Label (Invoice, Payment, FA, Manual)
Balances GL Account Balance Fiscal Year, GL Account Number, Opening balance, Total Debit, Total Credit, Ending Balance,..
Balances Customer Balance Fiscal Year, Customer ID, Customer Opening Balance, Customer Ending Balance
Balances Vendor Balance Fiscal Year, Vendor ID, Vendor Opening Balance, Vendor Ending Balance
Transactions GL JournalsFiscal Year, Fiscal Period, Journal Code, Journal Name, Journal Date, GL account Number,
Journal Description
Transactions Invoices/Credit NotesFiscal Year, Invoice Number, Invoice Date, Invoice Gross amount, Invoice Tax, Amount,
Vendor/Customer ID, Tax Code
Transactions Payments Fiscal Year, Payment Number, Payment Date, Payment Amount, Vendor/Customer ID
DATA TYPE DATA DEFINITION EXAMPLES OF DATA FIELDS
Risks & Penalties for non complianceeAudit in Germany
Penalties up to 250.000 EUR in case:
• Electronic bookkeeping maintained abroad without prior authorization
• Data access not provided to tax auditor within a reasonable timeframe
Bookkeeping not kept in accordance with German tax Law can lead to:
• Ex-officio assessment (Estimation of German tax base)
• Electronic bookkeeping (Server) to be relocated (back) to Germany
• GL bookkeeping process of German Tax Payer to be relocated (back) to Germany
18
Tools & Auditing method used by tax authorities eAudit in Germany – Periodic data mining
• Electronic tax data testing
• Software publicly available for sale
19
AIS Tax Audit and
IDEA
Macros
• Set of different macros at disposal
• Reproduce typical tax audits tests for income, wage and
value added tax
eAudit in Germany – Periodic data mining
Tools used by the German tax authorities
Example: Tax officer looking for non-deductible expenses for tax purposes
• AIS Tax Audit: query to detect non-deductible expenses like donations, penalties or
presents which are not accounted correctly
• Following steps are carried out by the tax officer:
1. Mapping of the relevant fields
2. Determination of filters (e.g.: GL accounts, keywords)
3. Preparation of a file including the relevant accounting lines
4. Preparation of a documentation regarding the findings
eAudit in Germany – Periodic data mining
Example / best practicesA. Mapping of the relevant fields Mapping
ERP
tables as
uploaded
into the
software
by the tax
auditor
Required
data fields
to
perform
the test
macro
eAudit in Germany – Periodic data mining
Example / best practices
B. Determination of filters (eg GL accounts, keywords)
• Limitation of GL accounts to be scanned
• Determination of keywords included in the posting text eg “Hotel”, “Gift”
Input range
of accounts
to perform
the test on
Enter search
terms
eAudit in Germany – Periodic data mining
Example / best practices
C&D. Non- deductible expenses – result & documentation
Test-macro result
Print report
eAudit in Germany – Periodic data mining
Example / best practices
C&D. Non- deductible expenses –
result & documentation
• Direct display findings with regard to
the non-deductible expenses
> all expenses are booked correctly /
incorrectly
• Tax auditor can prepare a
documentation regarding
his / her findings during the audit
• All validation routines in the software
can be performed
by the tax auditor in one batch, i.e.
very low effort with a
high statistical likelihood to find errors
leading to additional
tax assessments at the end of the tax
audit
eAudit in Germany
Case study
Situation:
• Multinational US headquartered
group in the biopharmaceutical
industry had a tax audit ongoing
(income tax and VAT) for the years
2008 – 2011
• The accounting was done in a
Shared Service center in Poland but
the German tax authorities were not
informed prior to relocating the
accounting to Poland
• 2013: the former ERP system was
changed to SAP ERP 6.0. The data
has been archived electronically by
the IT department without consulting
the tax / accounting department
• The tax auditor request:
• a direct access to the ERP system
of the German subsidiaries for the
years under audit (Z1 access)
• alternatively an electronic audit file
for tax for each entity and year
eAudit in Germany
Case study
Issue:
An analysis revealed that the former system could not be restored. A review of the
electronic data files showed that the data was not in line with the German financial
statements as the US-GAAP to German GAAP bridge was missing in the data
files.
Tax auditor threatened to estimate the taxable profits which would have led to
additional income taxes of approx. € 5mio.
eAudit in Germany
Case study
Outcome:
Client had to
• Go through a full restructuring exercise of the electronic raw data to prepare the
data in accordance with the financial statements in order to avoid an estimation
of the tax base and a relocation of the accounting back to Germany
• Draft new eAudit files for all years under audit
Recommendation:
Prepare the electronic audit files each year together with the filing of the tax return
in order to avoid issues with the tax authorities in a later tax audit.
eAudit in France
Introduction
eAudit Legislation into force since
01/01/2014 for all years open for audit
The eAudit legislation is applicable on:
• Legal entities
• Branches
• Non established VAT registered
entities
A transactional French GAAP tax eAudit
file (FEC - Fichier d’Ecritures
Comptables) must be submitted to the
French tax administration (FTA) at the
beginning of the tax audit.
The eAudit file has a fix format and
contains 18 mandatory fields
eAudit in France18 mandatory fields
Field name Information
1. JournalCode The journal entry code
2. JournalLib The journal entry label
3. EcritureNum The accounting entry number
4. EcritureDate The accounting date
5. CompteNum The account number
6. CompteLib The account label, under the French Accounting Plan
7. CompAuxNum The sub-ledger account number
8. CompAuxLib The sub-ledger account label
9. PieceRef Supporting document reference
10. PieceDate Supporting document date
11. EcritureLib Accounting entry label
12. Debit Debit amount
13. Credit Credit amount
14. EcritureLet “Apply-to/clearing” entry
15. DateLet Clearing date
16. ValidDate Posting date
17. Montantdevise Currency amount
18. Idevise Transaction currency name
eAudit in France
Risks & penalties for non-compliance
Limited administrative penalty, eAudit file remains due
Application of the ‘ex officio’ procedure
• Reversal of the burden of the proof from the start of the audit
• Additional 100% penalty computed on additional amounts of taxes to be paid at
the end of the audit.
eAudit in France
Case study
Situation:
A multinational operating in the IT
industry has an tax audit ongoing (VAT
& CIT) and generates the eAudit file for
3 years.
The client engages Deloitte for a
technical validation of the file.
After testing the file is provided to the
auditor.
The auditor challenges several entries
as it seems that eg some sales invoices
are booked as cost minus instead of
revenue.
eAudit in France
Case study
Issue:
Analyses disclose that the mapping
done between management GAAP and
French GAAP is incorrect. Several
turnover accounts in management
GAAP are mapped to French costs
accounts etc
Outcome:
Client had to
• Revise mapping & update their ERP
system
• Draft 3 new eAudit files
• Draft 3 corrected financial statements
Additional, the processes were heavily
challenged and an additional IT audit
was launched.
eAudit & your organisation
Conclusion
• Large volumes
• Extraction programs
• Assembly & storage
• ERP localizations
• Local adjustments
• Reconciliations
• Extraction – storage
• Data sources
• Data collection
• Data limitations
• Audit trail
• Legacy systems
• Policy review
• Process manuals
• Training
• Roles and
responsibilities
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication is for internal distribution and use only among personnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related entities (collectively, the “Deloitte Network“). None of the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 36
Transform today
for the challenges
of tomorrow
Invoice
Management
1
Maison de L’automobile15 December 2015
Hilde Vandeperre – Director, Deloitte BelgiumSara Claeys – Manager, Deloitte Belgium
1. Introduction
2. Sales invoices
3. Purchase invoices
4. Other relevant documents
5. Conclusions
Contents
© 2015 Deloitte Belgium 2
Introduction
© 2015 Deloitte Belgium
Although largely
harmonized, we need to
check which Member
State’s rules apply.
LEGISLATION
AUTOMATION
Automate as much as you
can but in a smart way.
HIGH VOLUMES
How to deal with high volumes
of invoices in an efficient but
VAT compliant way?
ANALYTICS
Set up in such way that invoices
can be easily checked in an
automated way
REPORTING
VAT reporting should be
possible in an easy manner,
avoiding human intervention.
CHANGE MANAGEMENT
Make a proper case study and
make sure everybody is on
board when automating.
Sales invoices
How to deal with sales invoices in an
efficient and VAT compliant way?
Things to consider:
• Invoice lay out
• Tax code determination
• Exchange of invoices to customers
• E-invoicing
• E-mail with PDF
• Point to point communication
• Use of a portal
• Use of a platform
• Some numbers
• Paper
• Storage of your sales invoices
© 2015 Deloitte Belgium
Sales invoices – lay out of your invoices
The importance of the lay out of your
invoices is often underestimated.
An invoice needs to be
• Clear at first glance
• Interpretation is per se not OK
• VAT compliant at minimum
• Extra fields like a ship from are very
useful
• Internally
• And for the customer
• Ideally contain intrastat info – if needed
• Is customer using OCR?
• You may not know but a lot of
companies do nowadays
• Then your invoice lay out matters
(e.g. templates, standard ERP lay
outs)
• Is a document that your customer
receives and needs to work with.
© 2015 Deloitte Belgium
Sales invoices – tax code determination
Typically all parameters are known to have a tax code determined automatically by the
system.
A typical SAP example:
CoD CoA MTC CTC + Tax code
E.g. BE BE 1 1 A1
E.g. BE BE 2 1 A0
E.g. BE AT 1 1 A2
© 2015 Deloitte Belgium
Sales invoices – tax code determination
Standard tax code determination is made more and more intelligent through
• Extra parameters
• Use of specific tax code determination software such as bolt ons, also for EU.
A typical SAP example:
CoD CoA MTC CTC + e.g. INCO Term Tax code
E.g. BE BE 1 1 EXW A1
E.g. BE BE 1 1 FCA A0
E.g. BE AT 1 1 DAP A2
© 2015 Deloitte Belgium
Sales invoices – tax code determination
Typical pitfalls
• Limited determination
• Only core business manual invoicing goes wrong
• Transport conditions are not taken into account
• Specifics are set up but the users are not aware of it, do not understand what has been
set up
• Lack of documentation
• Lack of training
• Users are not sufficiently informed about the possibilities
• Knowing what the system does or does not do, can prevent issues.
© 2015 Deloitte Belgium
Sales invoices – electronic invoicing
• The use of an electronic signature shall be
subject to the acceptance of the recipient
‒ Consent is still required.
• To avoid that people receive electronic
invoices which they are not able to
treat due to IT technical restrictions
• The need to guarantee authenticity of
the origin and integrity of the contents
remains mandatory
‒ Now applies to both paper and
electronic invoices
‒ Legibility of the invoice has been added
‒ From issue until the end of storage
period
• Definitions
‒ Authenticity of origin = Assurance of the
identity of the supplier or issuer
of the invoice
‒ Integrity of contents = Contents has not
been altered
© 2015 Deloitte Belgium
Sales invoices – electronic invoicing
Each taxable person shall determine the way to ensure the authenticity
and integrity
• By business controls
• Which create a reliable audit trail between an invoice and a supply of goods and services
− Supply chain documents such as PO, delivery notes, payment
− Three-way matching principle
• Technological means can still be used.
• EDI
• Qualified electronic signature created by means of a SSCD
• By 31 December 2016 an assessment report will be made.
© 2015 Deloitte Belgium
Sales invoices – storage
Invoices need to be stored for a legal
period – depends on the EU Member State
VAT legislation requires that
• Authenticity and integrity can be
guaranteed during the entire storage
period
• Electronic invoices can be stored within
EU (online access required). Paper often
needs to be kept locally.
• In principle to be archived in format as
issued
• Practicalities
• Do we have to print copies of
invoices issued?
• In principle yes, but quite a lot of
Member States allow that copies are
archived electronically
• Check specific rules
• Watch out with master data
changes
• Technical limitations
© 2015 Deloitte Belgium
Purchase invoices
Technology Organisation
How to deal with purchase invoices in an efficient and VAT compliant manner?
Things to consider:
• Each invoice you receive needs to get posted and a tax code needs to be assigned
tax code determination
• Each invoice you receive needs to be entered in your accounting
ideally in an automated way. E.g. via e-invoicing
But also have a solution in place to deal with paper invoices efficiently.
• Self-billing avoids that you have to enter the invoice in your accounting
can be done in an automated way.
© 2015 Deloitte Belgium
Purchase invoices - tax code determination
An example:
OCR ERP ERP FI
Tax Function
Module
Scanned
Invoice
Invoice
Structured
Data
Invoice
Postings
Auto-Tax
Assign tax
codes
Calculate
tax
amount
Determination
tables
ERP Tax
Codes Profiles
With OCR – Optical Character
Recognition – key tax information
will be determined on the invoice
(e.g. Vendor VAT ID)
Re-trigger
the tax
function
module
Other e-
invoice
© 2015 Deloitte Belgium
Purchase invoices - tax code determination
Acquire
Input Data
1. PO data(e.g. Ship To
Country)
2. Master data (e.g. Material Tax
Indicator)
3. Invoice
Data (e.g. Vendor VAT
number)
Apply
Business
Rules
Look-up Tax
Codes
Assign Tax
Codes
Tax Function module
Data elements
required for tax
determination
(i.e. input
parameters of
ERP condition
table)
Interpreting
data (e.g. how
to handle
exceptions,
missing
data,…)
Look-up tax
codes from
ERP condition
tables
Tax code
assigned to
each item line
of PO and non-
PO related
invoices
Invoice
Items with
Tax Code
© 2015 Deloitte Belgium
Purchase invoices – e-invoicing
The VAT rules that apply to e-invoices for Purchase invoices are
the same as for Sales invoices (see above).
Some key considerations:
• PDF invoices received via e-mail can be opened in an automated
way (e.g. e-mail connector) and processed by means of OCR.
• A portal (PO flip over) makes invoices easier to post/process in your
ERP system.
© 2015 Deloitte Belgium
Purchase invoices – storage
• In order to keep only the scanned images, specific requirements need to be met, which
are country dependent.
‒ E.g. France does not allow digital archiving of paper invoices received
‒ E.g. Belgium allows scanning under specific requirements
• A new circular letter is to be expected for Belgium
• Attention for 8th Directive refund claims or expense invoices
• Place where invoices are sent to for processing. Is it allowed to send invoices abroad?
© 2015 Deloitte Belgium
Purchase invoices – self-billing
Invoices may be drawn up by the customer, where there is
• A prior agreement between the two parties AND
• Prior means before first self bill is issued
• provided that a procedure exists for the acceptance of each invoice by the supplier.
• Both parties must be able to demonstrate the existence of the agreement separately
to the tax authorities
• Acceptance can be done implicit or explicit:
• E.g. by paying
Year end discounts – Belgian specifics that customer can raise a self-bill
© 2015 Deloitte Belgium
Other relevant documents
Your company will receive other documents than invoices which will have a VAT
impact:
• Expense note
• Digital expense notes
• VAT refund claims
• Customs documents
• Import & Export declarations
© 2015 Deloitte Belgium
Summary
Legislation is slowly
catching up with
innovation.
Should your company
wait to automate
invoice processes to
get e.g. more legal
certainty?
1No, surely not.
A lot can be done
already in a VAT
compliant way.
Reflection and
documentation is
key.2
Also
inspections will
be done in a
different way.
Be prepared
for it.3
A well
managed
invoice
process
will
prevent
errors/risk
4
© 2015 Deloitte Belgium
Questions
Questions
We are happy to
answer any question
you might have.
Tank you for
attending our break
out session.
© 2015 Deloitte Belgium
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication is for internal distribution and use only among personnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related entities (collectively, the “Deloitte Network“). None of the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 24
Tax Technology - Main challenges
Tax Transformation - Getting in control of your destiny
How to deal with the tax transformation - Need for a structured approach
Guiding principles for building a roadmap
Conclusion - Tax transformation journey
Contents
Tax Department is a large consumer of data
Several types of tax relevant data
4© 2015 Deloitte Belgium
Unstructured Structured
Financial
• Trial balances
• VAT ledger
• Expense reports
• Forecasts
• Tax payments
• GAAP adjustments
• e-Tax returns &
e-Audit
• Share options
• Tax adjustments
• Employee numbers
and locations
• Tax registrations
• R&D timesheets
• Business activities
• Due dates
• Work allocations
• Most statutory
accounts
• Paper tax returns
• Tax calculations
• Master file / Local file
Non-Financial
• Valuation reports
• DTA* recognition
• Tax advice
• APAs*
• Master file / Local file
• UTPs*
*DTA – Deferred tax asset
*APA – Advance pricing agreement
*UTP – Uncertain tax position
Complexity of Tax Technology Landscape
Fragmented origination & processing of tax
relevant data
5© 2015 Deloitte Belgium
Key tax trends will further increase technology
challenges in the tax function
7
Driver General trend Tax impact
Cost reduction • Economic changes
created need for
cost reduction
• Standardisation
• Outsourcing partners
• Automation of processes
Technology • (Tax related)
processes are
automated
• Combination of IT and tax expertise
• Changing workforce skills
Regulatory and
social change
• Changing
regulations,
specifically in EU
• Ethics and accountability issues
• Tax administration relationships
• Stakeholder focus
Transparency
and risk
management
• Increased scrutiny of
fiscal behaviour
• Rules about tax
processes
• Transparency about operational targets and
degree of control
• Defined responsibilities and upheld through
supervision
• Tax risks in business’ internal processes
• New legislation (national and international)
for management, supervisors and financial
authorities (e.g., the AFM, the Netherlands
Authority for the Financial Markets)
• U.S. requires stricter tax
processes.
• Korea requires disclosure of
Tax Control Framework.
• China requires access to
internal tax risk control
systems.
• Australia assigned risk ratings
to large enterprises.
• India is having more audit-
based controls.
• UK requires a Senior
Accounting Officer.
• The Netherlands implemented
Horizontal Monitoring.
• Germany requires standard
audit file for tax e-audit.
© 2015 For information, contact Deloitte Touche Tohmatsu Limited
Tax department objective
Transform to become more efficient in Operator
role and enable Strategist and Ambassador role
9© 2015 Deloitte Belgium
Current state Target future state
Structured approach needed
Framework: Key components of tax
transformation
11© 2015 Deloitte Belgium
Str
ate
gy a
nd
ex
ec
uti
on
Reg
ula
tory
co
mp
lia
nc
e
Cas
h t
ax
an
d p
aym
en
t m
an
ag
em
en
t
Clo
se
, p
rovis
ion
, a
nd
pro
ce
ss
Ta
x b
us
ine
ss
pla
nn
ing
Ris
k a
nd
ta
x c
on
tro
ve
rsy
Global direct tax
Global indirect tax
Accounting for tax (provision) People and
organization
Technologyand systems
Processand policy
Data and information
Enablers
Value drivers
Technology and data
Financial systems not tax sensitized
12© 2015 Deloitte Belgium
Financial systems (ERP, EPM, …)
often not tax sensitized
2 options
Option 1: Tax-enabled financial systems
• Long term
• Significant investment
• Outside of span of control of Tax
• Up to a point
Option 2: Remediation in Excel
• Short term
• Can be done with own resources
• Under control of Tax
• Flexibility
Most common approach, but…
Role of Excel Today
Making the headline
13© 2015 Deloitte Belgium
• 90% spreadsheets contain errors
• Spreadsheets used in business decisions can be costly
• One error can destroy reputation
Common Tax/Finance issue
End User Computing Application (EUCA)
14© 2015 Deloitte Belgium
• Excel workbooks are complex and manually intensive to create,
maintain, use, and are highly prone to internal design errors that may
result in flawed data
• Multiple versions of Excel documents impact decision making
• Unautorised access to Spreadsheet can be altered
• Input errors: Inaccurate cut-paste, inadvertent changes in cells,
incorrect links, import of incorrect data or import with wrong
parameters
• Logic errors: Due to incorrect formulas, and incorrect input data
• Usage error: Incorrect use of functions, ranges and references
• Inconsistent processes across tax departments/locations result in data
integrity issues
• Focus more on EUCAs by internal and external auditors
• Accurate of data can be compromised in Excel due to formula errors,
manually entered data and version control issues
Fixing Excel Spreadsheet for Tax
Improve, integrate, manage
15© 2015 Deloitte Belgium
1
2
3
Improving individual spreadsheets
The highest risk spreadsheets could be improved. This might
include making them simpler to operate, making the formulae
and flow of information more transparent to the reviewer, and
enhancing the controls present in them. Training would also
ensure best practice designs are used in the future
Integration within wider process
Improving how the spreadsheet interacts with other processes
helps validate its role, and gives greater confidence on the
robustness of the wider process. For example: automating what
information should and can come in; designing and automating
key reports
Managing large numbers of spreadsheets
Large numbers of spreadsheets leads to requirements such as
version control, knowing when and what changes are made
and a need to identify and visualise links between workbooks.
Off-the-shelf or bespoke control environments help manage this
Structuring the Data Flow
Tax Management and Tax Process Systems
16© 2015 Deloitte Belgium
Outsource provider
teams
• Local offices
• Compliance centres
• Centres of excellence
• Service centres
• A mix of resources
• Onshore
• Nearshore
• Farshore
Outsource provider
teams
• Local offices
• Compliance centres
• Centres of excellence
• Service centres
• A mix of resources
• Onshore
• Nearshore
• Farshore
Tax Management System
Example of Tax Workflow Tool - OWM
17© 2015 Deloitte Belgium
Calendar
•Manage Tax
Deadlines
•Publish and track
external and
internal due dates
•Available “Out-of
–the-box” global
content
•Tax portal or
desktop, including
visibility into KPI’s
•Proactively
monitor status of
workflow,
calendar, and data
collection
activities
FileRoom
•Web-based document
management &
storage
•Document indexing
for quick search
•Control access to
documents and
manage versions
•Task and due
date management
•Auto notifications
to Tax Dept
members of
assigned tasks
• Integrate process
control steps and
sign-offs
WorkFlowDataFlow /
Data Management
•Standardize
collection of
supplemental tax
data
•Consolidate data
from data collects
and integrate with
tax workpapers or
tax systems
Dashboard Reporting
Tax Process System
Example VAT compliance tool - SMART
18
Data
Collection
Data
Validation
Data
Processing
Deliverables
Preparation
Review &
Sign off
Submission
& Archiving
Management
ReportingPlanning
SMART: automated processing application
People and Organisation
Transformation impacts Tax Practitioners
19
Talent diversification in Tax
• Strong tax technical expertise and F.A.T. (Finance, Accounting and Tax) backgrounds
remain important, but more STEM (Science, Technology, Engineering & Math)
related skills will be required
• Drives change in how to attract, recruit, retain & grow people
• Impacts professional service providers and other sourcing channels
Tax Transformation Roadmap
Guiding principles for step by step approach
21© 2015 Deloitte Belgium
• Fully engage in the tax
transformation journey
• Put in place governance and run the
tax transformation as a program with
intermediary milestones, various
workstreams, interdependencies,
stakeholder and people
management, …
• Define your tax processes
• Identify risks & opportunities to
improve (input to business case
for transformation)
• Define priorities
• Elaborate vision and roadmap
• Fix the basics and implement quick wins
• Get in control of Excel remediation
• Automate the provision process
• Bring return preparation in-house
• Fully leverage and integrate the licensed ONESOURCE products
Case study – Sample Roadmap
Client’s objectives
Opportunity Workstream Impact Priority
Source data Phase I: Expand blueprinting and define
requirements for automation, data collection, and
accounting/finance
High
Phase II: Build, Test, and Deliver based on
Phase IMedium
Automation
Phase I: Design Automation Solutions leveraging
“Source Data” workstream Phase IHigh
Phase II: Build, Test, Deliver based on Phase I Medium
Tax
ProvisionPhase I: ONESOURCE Tax Provision Upgrade Medium
Return to
Provision
Phase I: Return to Provision Design, Build, and
TestMedium
Work Flow
Manager
Phase I: Design Requirements for selected
softwareMedium
Phase II: Build and Test based on design in
Phase ILow
Case study – Sample Roadmap
Opportunities overview
Workstream May
2015
Jun
2015
Jul
2015
Oct
2015
Jan
2016
Apr
2016
Jul
2016
Oct
2016
Jan
2017
Source data
Automation
ONESOURCE
Tax Provision
ONESOURCE
Return to
Provision
ONESOURCE
Workflow
Manager
Case study – Sample Roadmap
Draft timeline
• Tier legal entities based on materiality to ensure that Client is focusing
time on the units that make up a pre-defined % of pre-tax book income
• Eliminate duplication of effort
• Client performs tasks twice, once in Microsoft Excel and once in the
software to validate ONESOURCE calculations
• Review data sources for each phase of the tax life cycle and document
the data providers and requests within a workflow tool
• Build standardized packages that are connected to ONESOURCE
products
Case study – Sample Roadmap
Strategic observations
Tax Transformation journey
Wrap-up
27© 2015 Deloitte Belgium
- Data and Technology cause challenges for Tax
departments: landscape is complex and
- Significant focus on operational matters
- External trends further accentuate those
challenges
- Technology enabled Tax Transformation is
required to address those challenges
- A long term vision and structured approach is
needed given there are many areas to
address: data, different tax processes,
technology & systems, people & organization
1
2
Str
ate
gy a
nd
ex
ec
uti
on
Reg
ula
tory
co
mp
lia
nc
e
Cas
h t
ax
an
d p
aym
en
t m
an
ag
em
en
t
Clo
se
, p
rovis
ion
, a
nd
pro
ce
ss
Ta
x b
us
ine
ss
pla
nn
ing
Ris
k a
nd
ta
x c
on
tro
ve
rsy
Global direct tax
Global indirect tax
Accounting for tax (provision) People and
organization
Process and policy
Technology and systems
Data and information
Enablers
Value drivers
Tax Transformation journey
A roadmap to enable the shift in focus from
Operator/Steward to Strategist/Ambassador
28© 2015 Deloitte Belgium
Current state Target future state
- Approach and vision need to translate into a transformation roadmap
- Transformation should be run as a program3
29 Copyright © 2015 Deloitte Development LLC. All rights reserved.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of
which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche
Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its
subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively,
the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for
any loss whatsoever sustained by any person who relies on this communication.
Copyright © 2015 Deloitte Development LLC. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited
Transform today
for the challenges
of tomorrow
Indirect Tax
Analytics:
Intelligent data
1
Maison de L’automobile24 November 2015
Hilde Vandeperre– Director, Deloitte BelgiumMo Giovanni Gijsels – Senior Manager, Deloitte Belgium
Setting the scene
• Is your company involved in import or export activities?
• Do you know the duty burden of your company?
• Do you know departure and destination countries?
• Do you know if preferential duty rates are applied?
• Do you know your brokers?
Setting the scene
ERP environment only covers basic functionalities
The end result is often not coming back
3rd Parties are doing the actual filing
What
companies
think they are
doing, is quite
often different
from what they
are “doing”
Specific flows require a specific treatment
Setting the scene
How many
brokers do
we have?
EXW or DDP?Proof of
export?
What is the UCC
impact?
New CN
codes
Do we use preference?
Are we over-
or under-
reporting
duties?
Are we impacted
by export
controls? …
VAT
deferral?
CGT Analytics: tools and sources
Own ERP Data
Declaration data
GTM Dashboard
Other tools and support
12
34
Working with ERP data
• Always available
• Rather easy to obtain
• Good starting point:
• Important trade
lanes
• Important materials
• Master data quality
• …
• Trends & Indications
• Client specific
• Complex for cross
system comparison
• Does not say anything
about the actual data
Working with declaration data
• Actual declared data
• Provided by
authorities or brokers
• All customs elements
• Cross checks with
VAT
• Full overview
• Standard
• Not possible in all
countries
• Broker data: did we
cover them all?
• Differences in format
remain
Working with own GTM data
• Actual declared data
• Own data
• Possible for multiple
countries
• Full overview:
• Reporting
• Analyzing
• Trends
• Client specific
• Link with logistic
systems
• Not always possible for
all processes &
countries
• Data infrastructure
requirements
Supporting tools
• Address specific need
• Landed cost tool
• Classification tool
• FTA
• Low cost of
implementation
• Ease of use
• Multiple users (e.g.
intranet)
• Should be a second
step, not a starting
point
• No full integration with
company systems
• Patchwork of solutions
• Limitations
Setting the scene
• Are your ‘VAT’ and ‘intrastat’ master data under control?
• Is the VAT treatment of an invoice following the actual flow of goods?
• Do you know who processes AP invoices the most correctly?
• Do you know whether AP invoices are processed timely?
• Do you know which invoices are the most important ones to check in terms of
amounts?
Setting the scene
Impact of
Incoterms? Services for
invoices issued
to established
entities?
Actual flows
How many ERP
systems do you
have
Missing CN
codes
How many different VAT numbers?
Consistent
VAT
treatments
applied?
Correct use of
VAT numbers? …
VAT input
deduction
VAT Analytics: tools and sources
Own ERP Data: logistical data
Own ERP Data: master data
Own ERP Data: financial data
Other tools and support
(e.g. VAT rate tables)
12
34
Working with logistical ERP data
• Always available
• Rather easy to obtain
• Good starting point:
• PO and SO
• Delivery information
• …
• Challenges:
• Link to financial
data (e.g. various
materials, only 1
tax code)
• Possible interface if
logistical & financial
data are in different
ERP systems
Working with ERP master data
• Check on availability
• Rather easy to obtain
• Good starting point:
• Customer data
• Supplier data
• Material master
data
• …
• Check between
transactional master
data used and static
master data (e.g. VAT
number)
• Possibility to look at
missing master data
for relevant
transactions only.
• Get insights in
amounts.
Working with ERP financial data
• Always available
• Rather easy to obtain
• Good starting point:
• Ledgers
• Accounting
• Tax codes
• …
• Line level detail
comparisons
• Comparisons:
• Per entity
• Per country
• …
• High volume of dataµ
• Gain new insights
Supporting tools
• Updated VAT rate
tables
• Updated list of
commodity codes
• List of commodity
codes with specific
VAT treatments
• Import/Export data
• Local reverse charge
rules
• VAT compliance
related information
• Importance of working
with updated
information
Questions
Questions
We are happy to
answer any question
you might have.
Thank you for
attending our break
out session.
© 2015 Deloitte Belgium
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication is for internal distribution and use only among personnel of Deloitte Touche Tohmatsu Limited, its member firms, and their related entities (collectively, the “Deloitte Network“). None of the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 20
Transform today for
the challenges of
tomorrow
Corporate taxes and
statutory accounts:
A single challenge
1
Maison de L’automobile15 December 2015
Gino Van Hoornyck - Deloitte BelgiumChris Kinders – Deloitte Netherlands
• Tax compliance delivery models
• Integrating statutory accounting and corporate tax reporting
• Technology
• How to get started
Contents
Tax compliance delivery modelsOur global operating model is used to deliver services via three overall methods that recognize the degree of clients’ desired
centralization. We are seeing a shift in the marketplace toward coordinated and centralized delivery, which provides increased
visibility, process efficiencies, and risk mitigation.
• Full visibility
• Mitigated risk
• Improved standardization and
process efficiencies
• Limited visibility
• Lacks consistency and efficiency
• Full visibility
• Further process efficiencies, data
quality and risk mitigation
• Data analytics, tax modeling, etc.
local-to-local delivery central-to-central delivery
01/ 03/Delivered and
managed locally
Delivered and
managed centrally,
supported locally 02/ Delivered locally,
managed centrally
CoordinatedDecentralized Centralized
Tax compliance delivery models
Key decision drivers
OrganisationSSC strategy
Role of retained finance
Tax and local GAAP knowledge at SSC
Process
/ Data
Structured vs unstructured process
Granularity of data and tax sensitization
Quality and location/ownership
TechnologyNumber of ERP / legacy system(s)
Harmonization of ERP systems
Consolidation, integration and level of localisation
Business Fully fletched vs stripped
Stability of the business model
Local
requirements
Complexity of local requirements / regulation
Language requirements
Centralised Decentralised
Statutory accounting and corporate tax reporting
Why integrate these processes?
6
• Harmonized E2E compliance process
• Integrated workflow management
• Simplify data management
• Reduce lead-time & efforts
Process Efficiency
• Greater visibility of filing status
• Transparency of filings through GAAP to tax rec’s
• Increased data consistency
• Increased quality of filings
Risk Management
Components of a standard E2E compliance process
• Definition of a standard 8-Steps global process for the management of
compliance
• Review of key milestones to identify process owners: integration into a
responsibility matrix
Statutory accounting and corporate tax reporting
Data Collection Data ValidationData
Processing
Deliverable
Drafting
Review & Sign
off
Submit &
Archive
Mgmt.
Reporting
Process
Planning
Statutory accounting and corporate tax reporting
Key actors to consider
SSCs
CoE
(Hubs)
Global
Tax
RFO
Consulted
Informed
Accountable
Consulted
Informed
Responsible
Informed
Responsible
Consulted
Informed
Defining main activities
Statutory accounting and corporate tax reporting
Deloitte Tax Insight
Data
Collection
Data
Validation
Data
Processing
Deliverable
Drafting
Review &
Sign off
Submit &
Archive
Management
Reporting
Process
Planning
• Confirm availabilities
• Calendar of internal due
dates
• Share business info
update
• Provide source data
• Prior year package
• Provide additional data
• Business information
update
• Clarify/confirm ad hoc
matters
• Review and approve • Submit CIT return and
statutory financial
statements (where
client is required to do
so)
• Assess impact of non-
routine business events
on stat & tax
compliance reporting
• Discuss impact of non-
routine business events
on tax compliance
reporting
• Prepare draft CIT
returns
• Review book-to-tax
reconciliations (RTA)
• Finalize CIT return
• Prepare Deloitte
standard Tax Reporting
Memo
• Review and discuss
client comments
• Submit CIT return and
statutory financial
statements (where
Deloitte is able to do
so)
• Assess impact of non-
routine business events
on stat & tax
compliance reporting
• Review due dates and
agree calendar
• Governance and
process
• Perform data validation
• Monitor data gathering
process
• Inform client of
additional information
needs
• Discuss impact of non-
routine business events
on tax compliance
reporting
• Monitor timely requests
and receipt of data from
the regional vantage
point
• Prepare local GAAP TB
(GAAP conversion)
• Prep book-to-tax
reconciliations (RTA)
• Prepare statutory
financial statements
• Finalize statutory
financial statements
• Review Tax Reporting
Memo for consistency
checks
• Review and discuss
client comments
• Post return and
deliverables to DTi
• Data analytics
• Regional / global
reporting on tax issues
Company
Deloitte
Local
Global Tax
Center
Supporting
Technology
DCT – Local CIT tools E-filing software
Statutory accounting and corporate tax reporting
A new resourcing model
Historic resourcing
model
Future resourcing
model
New skillset:
• Accounting and Finance
• Tax technical
• Business
• Technology
• Communication
• Mobility
People are knowledge workers
Technology Knowledge
Process
Technology - Deloitte Tax Insight
DTi, our web-based collaboration solution that supports efficiency, transparency and
enhanced performance. This secure web-based “digital dashboard” provides access to our
collaboration space, allowing us to share information with our clients 24 hours a day.
Key Benefits
• Achieve greater visibility
• One source of truth
• Improved control
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 standardization
• Improve consistency
• Minimizes on going
report maintenance
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.
DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see
www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member
firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most
complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte
Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained
by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 17
Transform today for
the challenges of
tomorrow
Closing
Maison de L’automobile15 December 2015
Andre Claes – Partner, Deloitte BelgiumMark Kennedy – Partner, Deloitte UKPatrick Joucken – Partner, Deloitte Belgium
1
The business responseManagement of tax
Tax
Governance
and Risk
Management
ResourcingTax Operating
Models
Tax Data
and
Systems
4
Components/building blocks of the tax functionTax Resourcing Models
• Tax objectives
• Tax strategy
• Technology strategy
• Tax risk framework
• Process
determination
• Controls operation
and internal audit
• Technology tools
• Compliance manual
• Tax risk register
• Tax audit support
• Tax litigation
• Master Data
Management
• Tax return data
• Local Stat Accounts
• Return preparations
• Compliance
Outsourcing
• TP documentation
preparation
• Financial close for
Tax
• Reconciliations
• Indirect Tax
• Accounting analyses
for Tax
• Management
reporting on Tax
ComplianceAccounting and
reportingTax strategy
Operational risk
management
Organisation and resources
Automation and technology integration
Operational Strategic
More likely in SSC More likely in Tax
5
Facing big questions from stakeholders
6
“What would a
5bp increase in
our ETR mean
for us?”
“How do we
know if are
compliant across
all our taxes,
everywhere?”
“What and
where are our
biggest tax
risks?”
“What is the
total cost of my
tax function?”
Tax Manager ObjectivesMoving from Operator to Strategist – Current state
9%
Reporting
10%
Review
15%
Rework
22%
Tax
Adjustments
40%
Information
Gathering
StrategistAmbassador
3% Stakeholder management 1% Planning
8
Where do you stand?Questions
1. Do you have a tax technology roadmap?
9
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
2. Are all tax processes properly documented for all countries?
10
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
3. Are tax roles and responsibilities well defined between finance and the tax
department?
11
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
4. Do you use SSC for producing tax compliance data?
12
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
5. Are the VAT ledgers produced by a system and require little or no adjustments?
13
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
6. Are statutory accounts produced decentrally and reviewed centrally by tax?
14
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
7. Have you started preparing for CbC reporting obligations?
15
Rating scale:
1 – I have not started yet
5 – We are ready!
Where do you stand?Questions
8. Are you prepared for tax eAudits in Europe?
16
Rating scale:
1 – I have not started yet
5 – We are ready!
Tax Manager ObjectivesMoving from Operator to Strategist – Future state
10%
Reporting
10%
Review
10%
Rework
10%
Tax
Adjustments
10%
Information
Gathering
25%
Stakeholders
Management
25%
Planning
17
“We always overestimate the change that will occur in the
next 2 years and underestimate the change that will occur in
the next 10. Don’t let yourself be lulled into inaction”
- Bill Gates
“God grant me the serenity to accept the things I cannot
change, the courage to change the things I can and the
wisdom to know the difference”
- Ignatius Loyola
18
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.
DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see
www.deloitte.com/about for a more detailed description of DTTL and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member
firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most
complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence.
This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte
Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained
by any person who relies on this communication.
© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 19