KPMG’s TaxOne

KPMG’s TaxOne – Transform your tax function by leveraging best-of-breed tax technology

Zurich, 4th June 2015

Hartwig Hoffmann, Christoph Funke

Holger Eilers, Andreas Wiesner

kpmg.ch

2© 2015 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.

Wrap-up and closing

Agenda

Welcome and introduction to TaxOne Platform

TaxOne Compliance Manager & Analyzer

Breakout sessions: A structured Transfer Pricing documentation Efficient and integrated TaxOne reporting

18:30h – 18:45h

16:30h – 16:45h

16:45h – 17:45h

17:45h – 18:30h

Apéro riche18:45h – until end

Welcome & Introduction to TaxOne


Tax function evolution

10-15 years ago 5-10 years agoValue

Risk

The focus of the tax function has evolved over time as its responsibilities have increased and it has been expected to deliver more with less.

■ Ensuring accuracy and timeliness of financial reporting and compliance

■ Managing tax risk and tax authority audits

■ Controlling costs– shared services, outsourcing, etc.

■ Increasing efficiency – ERP implementations, tax technology, etc.

■ Delivering cash tax savings or deferral

■ ETRoptimisation

Cost

Transparency

■ Managing information for country by country reporting, CRD IV, etc.

■ Managing reputation with a focus on tax in the media

Today – 5 years ago

Today

Compliance


Do you face the same challenges?

Increased complexity of global business models

Lack of tax information at headquarter and lack of transparency in tax processes

Tight closing deadlines create condensed cycle times for tax information management

Financial Controllers have different degrees of understanding in regard to tax requirements

Global tax complications such as working with multiple entities, currencies, tax legislations and multi-level tax processes

Legal requirements are on the increase but headcount in the tax department continues to decrease

Tax personnel spend a significant amount of time manually gathering and validating data and spreadsheets – they have minimal or no time to carry out any value-added analyses


TaxOne Reporter

TaxOne

Planner

TaxOne

Compliance Manager

TaxOne

Transfer Pricing Data Manager

■ Monitor and control tax risks and compliance as well as tax payments by using the dashboard

■ Manage all relevant deadlines with tax calendar

■ Flexible Questionnaire functionality■ Archiving of tax-relevant documents

■ Calculation of current and deferred taxes according to IFRS and local GAAP as well as tax rate reconciliation

■ Consolidated analyses for the individual reporting units

■ Supply of data for notes in various reports/ disclosures in line with IAS 12

■ Forecast for different tax positions■ Multi-year planning (e.g. ETR)■ Tax Controlling

■ Global solution for transfer pricing documentation■ Supports both centralized and decentralized

approach

TaxOne – An all-inclusive Tax Information Management Solution

TaxOne

Contract Manager

■ Corporate governance of contracts

■ Transparency on contractual relationships

■ Transparency on Terms & Conditions

TaxOne Analyzer


TaxOne – Extract from our References

Transparency on tax risks and compliance


Latest Global KPMG Tax Management Study


TaxOne Compliance ManagerKey functionalities

The dashboard reports on your key figures and statuses, such as deadlines for filing tax returns, tax payments and tax audit risks

Flexible Questionnaire functionality

The tax calendar provides an overview of all deadlines

Monitoring of the status of each tax risk position indicated in red, amber or green

Sophisticated data upload and filing functions for relevant tax documents

Automatic reminder functions that send emails to those responsible when pre-defined deadlines are reached

Flexible definition and monitoring of tax processes


Setting the Scene

Christoph Funke

Ketinax International AG, Headquarter

Responsible for group tax risk and compliance & treasury

Holger Eilers

Acreda GmbH, German entity

Responsible for tax risk and compliance at a local level


Benefits of using TaxOne Compliance Manager

Entry and monitoring of tax compliance issues at entity and group level Monitoring of deadlines with indications (escalation levels) with automatic

reminder emails

Grouped overview on single topics (Tax Compliance, Tax Audits, Tax Payments, Consulting Costs)

Easy identification of challenging areas

Group-wide overview of future and past tax payments/reimbursements Monitoring of deadlines with indications (escalation levels) and automatic

reminder emails

Entry and monitoring of tax audit risks at entity level Group-wide overview of total of tax risks and potentially necessary adjustments

to provisions (Tax transparency)

Freely definable process steps and responsibilities Escalation concept and possibility to attach documents

Transparency in tax compliance at both global and local level

Monitoring of enterprise-wide tax risks and obligations

Top-down dashboard view on essential tax areas

Efficient managing of total tax contribution

Flexibility in defining and monitoring ad-hoc processes

TaxOne Analyzer


TaxOne Analyzer

Overview

Fully flexible creation of reports individually tailored to your specific demands

Utilization of data from throughout all available TaxOne modules to create a topic related data output in your report format

Functionality Features Optional

Comprehensive individual data reporting Access to all data entered and calculated in each of the modules of TaxOne

Extensive options for report design (e.g. graphs, charts, tables, etc)

Combine relevant information into one report exactly designed down to your specific reporting demand (e.g. creation of Management reports).

➜ Automatic and ad hoc genreation of reports, based on latest information derived for the modules of TaxOne

Several exporting options and report formats: PDF, Powerpoint, Excel, Word, etc.

Data utilization from external data sources

Additional features, such as mobile capability


TaxOne Reporter

TaxOne

Compliance Manager

TaxOne

Transfer Pricing Data Manager

TaxOne Analyzer

TaxOne Analyzer

File

Excel

XML

SAP; Oracle; Others

Data WarehouseData Mart


TaxOne Analyzer

Management Reporting

Examples

Country by Country Reporting

Efficient and integrated Tax Reporting with TaxOne


Challenges in Tax Reporting

Low level of automation

Complex business models

Coordination with Accounting

Fulfillment of IAS12 reporting

requirements

Tight deadlines

High risk of data inconsistencies

Lack of transparency in

regard to key factors

TaxFunction


Calculation of current and deferred tax and assessment of tax

disclosures with REPORTER

TaxOne Reporting process

(Local) ERP systems

Consolidation systemGroup reporting

4) Booking of tax values

5) Validation between booked and calculated values in TaxOne

6) Validated tax data available for group reporting

3

(Local/Global) ERP systems

1

21) Import of balance sheet values

(Local GAAP/IFRS) via automatic Web Service or CSV/XML

2) Tax data processing and calculation (current and deferred taxes)

3) Automatic generation of notes


TaxOne Reporter

• Pool of data is consistent, thanks to a standardized tax calculation and reporting on ONE web-based platform

• Data is highly transparent and readily available

• The centralized database makes local entity entries immediately available group-wide

• Key positions and how they develop is easily retrievable both at group and entity level

• High degree of integration into exiting system landscape to ensure maximum process automation

• High degree of automation in reduces manual work (opening balances, losses, tax groups)

• Notes to financial statements according to IAS 12 are automatically generated


TaxOne Setting the Scene

2014 year-end reporting for Accreda GmbHMonitor and review 2014 consolidated group reporting

Correct entries for final submission Review corrections and create group reports

Christoph Funke

Ketinax Group, Headquarter

Responsible for group-wide tax reporting

Holger Eilers

Baida, Singapur

Responsible for tax reporting at local level


TaxOne Benefits of using Reporter

Develop, utilize and valuate tax losses Automatically consider balance sheet differences that are income statement-related Calculate deferred taxes on balance sheet differences and tax losses Benefit from the automatic true-up functionality

Customizable import interfaces (manual or automatic) to upstream systems: - Import of balance sheet and p/l account values

Customizable export interfaces (Manual or automatic) to downstream systems possible - e.g. for validation with booked values on consolidation system

Local entity entries immediately available through centralized database

Transparent, detailed group and entity-based overview on the development of key positions

Automatically generate reports required for your tax notes (e.g. Reconciliation & ETR) and further relevant reporting figures

Automatically generate a pool of data for Notes to financial statements according to IAS 12 Benefit from customizable reporting groups

Three planning types are available (multi-year planning, forecast & tax audit simulation)

Automatic import of values from TaxOne modules and from external systems

Calculate and report current and deferred tax consistently and in a standardized way

Automatically generate a pool of data and reports for tax notes

Interlink it with upstream systems

Increase the quality and transparency of your data at local and group level

Benefit from a fully integrated tax planning

A structured Transfer Pricing documentation


TaxOne Module TaxOne Transfer Pricing Data Manager – Design Principles

• For most countries there is today a historical track record how tax authorities deal in practice with transfer pricing documentation requirements. Based on this experience there is a clear tendency that tax authorities are much more focused on specific transfer pricing information and are not any more predominantly interested in a large quantity of information

• This gives space to taxpayers to streamline their documentation reports and establish lean and more efficient documentation approaches. Such documentation approaches usually show the following features which are also the design principle of the TaxOne Transfer Pricing Data Manager:

High flexibility through modular structure

Information is only used once in order to avoid double work and thus inconsistencies

Central coordination and local customization

Focus on penalty protection and shift in burden of proof


TaxOneModule TaxOne Transfer Pricing Data Manager – System Structure

Level 1 – Documentation Period● Definition of documentation period (e.g.

2014)● Select group entities for TP

documentation

Level 2 – Master Data● Definition of value chains & transaction

groups● Attribute of roles to legal entities (e.g.

distributor, manufacturer) ● Pre-setting of functions & risks and

transfer pricing analysis parameters

Central users (e.g. GroupTax) only

Level 3 – Edit documentation● Add specific information for each

transaction● Transfer pricing analysis including arm`s

length test for each transaction / legal entity

Input by local or specific users (e.g. SSC)


TaxOne Benefits of using Transfer Pricing Data Manager

■ Support in the preparation and defense of the transfer pricing documentation in local audits

■ Reduce the risk of penalties and income estimation because of violations against legal obligations to prepare documentation

■ Efficient handling of documentation workload by relying on structured information entry screens, templates and default texts

■ Standardized documentation processes, which consider data entered regarding previous periods

■ Documentation completeness check on a company level, value chain level and transaction level (traffic light system)

■ Available reports enable a risk oriented review considering transaction amounts and transfer pricing methods applied

■ Involvement of central and local resources taking into account their specific knowledge

■ Consistency among the information provided locally is ensured by documentation processes and central review functionalities

■ Cost savings by preparing documentation or documentation elements in house (minimization of consulting costs)

■ Benefit from roll-forward functionalities in TP Data Manager that minimize workload in future periods

Being prepared for audit

Combine central and local knowledge and resources

Efficiency through structured and standardized processes

Risk oriented review and risk management

Realization of cost savings


Centralized web basedTransfer Pricing Documentation

■ Worldwide increasing transfer pricing documentation regulations and compliance burden

■ Growing focus by specially trained tax authorities on transfer pricing

■ Finding a balance in order to be compliant in the area of transfer pricing but limiting the efforts and costs internally

■ Lack to provide evidence during tax audits especially when tax audit covers periods some years ago

■ Having efficient processes to ensure group wide consistent transfer pricing document and reasonable compliance costs

SolutionChallenges

TaxOne Module TaxOne Transfer Pricing Data Manager – Summary

■ Realization of cost savings by preparing Transfer pricing documentation in house and roll-forward functionalities

■ Being prepared for tax audits and reduce risks of penalties and income estimation

■ Preparation of transfer pricing documentation possible within short-time frame due to modular concept

■ Already existing transfer pricing documentation can be stored and submitted to tax authorities immediately

■ Combine central and local knowledge and resources and therefore ensure consistency among the information provided locally

Benefits

TaxOne module TRANSFER PRICING

DATA MANAGER

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Wrap-up and Q&A


Journey to the Tax Function of the Future

Establish the as-is position

Implement effective

technology solutions

Embed efficientprocesses

Deploy the right people

with the right skills

Design the organisational

model

Tax function of the future

Manage risk and create appropriate

KPIs

Develop the tax vision and

policy

Organisational Model

Process and Responsibility

Systems and Technology

Data and Information

People and Capability

Governance and Risk

Performance Management


Enabling the tax department of the future – key areas

Improving accountability – to clarify the tax department’s roles and responsibilities within the

context of a company-wide, board-approved tax governance framework

Improving standardization – to automate and strengthen tax processes and controls and

ensure all tax compliance obligations are met

Improving connectivity – between the tax department and other business areas so they work together as proactive partners in setting and advancing

business objectives

Thank you!

Economy & Finance

KPMG’s TaxOne