14 Employment tax governance frameworks - EY - US · 2015-07-29 · Page 4 Employment tax governance frameworks What we will cover today Pressures that are making this a real issue

Employment tax governance frameworksManaging and resourcing for an increasingly global employee population

26–29 October 2014

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Page 3 Employment tax governance frameworks

Presenters

► Jon Henderson – Serco Group plc► Ben Webb – GE► Ian Hopkinson – Ernst & Young LLP (UK)


What we will cover today

► Pressures that are making this a real issue today► The key risks► Responsibilities that fall to global lead for employment taxes► Model approaches► Tools► How to resource this area

We have a framework for discussion and some case studies and real life examples but welcome your participation.


Employment tax compliance – external pressures

► Increasing rate of change► Fair tax debate, base erosion and profit shifting, increased anti-

avoidance legislation and country-by-country reporting obligations ► Article 15(2) modernization and local tax authority interpretation ► Information sharing► Local tax regulations changing► SOX/SAO/BRR/KYC► Global expansion► Prevalence of social security and other payroll taxes and rising or

removal of caps

Sox – Sarbanes-Oxley ActSAO – senior accounting officerBRR – business risk reviewKYC – know your customer


Employment tax compliance – internal pressures

► Change of demographics – more mobile people and more locations► Big data► Analytics► Tax at the top table – reputational pressure► The risk management agenda► Job description: the addition of the small word “global”► Globalization, standardization and automation of shared HR and

payroll services► Examples

Are others seeing these and other challenges?


So, what are the big employment tax compliance risks?

► Change in revenue authority attitude► Equity remuneration► Short-term business travelers► Assignments► Employed, self-employed and non-employee workers► Benefits in-kind► Management of expense payments► Termination payments► The impact of previous tax planning and structuring► Acquisitions and divestments


What am I expected to do?

► Support the broader business strategy► Be part of the broader tax strategy► Comply locally in all (key) jurisdictions► Keep up to date with change► Collate good quality management information► Add commercial value beyond pure tax compliance► Do this with a whole raft of stakeholders – finance, HR, reward,

operations, cross-border and local teams, etc.► Efficiently seek, interpret and communicate external advice ► Send clear and frequent signals regarding the compliance and value-

added cost-savings achieved


How can I do this – what types of approaches are there?

► What constitutes a tax control framework?► What are the key constituent parts?

► Some live examples:► Centralized control (tight)► Regionalization or localization (loose)► Other (hybrid)


What tools have we seen work well?

► Responsibility assignment matrix (RACI) analysis► Clear policies► Risk register► Tracking tools (dashboards, databases, etc.)► Process maps► Well-formed communication protocols► A model benefits and payroll operation to start, including

tax tollgates


Resources – how do I make the case for additional support?

► Demonstrating the value:► Bringing broader perspectives to the business► Managing of reputation► Maintaining the license to do business► Use high-quality analytics► Achieving cost savings

► What are competitors doing?► Where do professional advisors fit in?


Further questions and observations

Documents

14 Employment tax governance frameworks - EY - US · 2015-07-29 · Page 4 Employment tax governance frameworks What we will cover today Pressures that are making this a real issue