Presenters · 2020. 6. 11. · Context Finance and Tax professionals are used to regulations evolving all the time, but 2020 is changing everything. It’s becoming a cliché, but

Presenters

Christiaan Van Der Valk

VP Strategy

Sovos

Sarah Fane

Head of Research

sharedserviceslink

• Send me your question early

• Use this opportunity to get the answers/info you seek

• The sooner you send me the question, the more likely it will be asked

• Remember to stay on for Q&A in the last 10 minutes of the session

Questions

-pay

Your copy of the slides

The slides will be available

after the webinar at

www.sharespace.digital

Context

Finance and Tax professionals are used to regulations evolving all the time, but 2020 is changing

everything. It’s becoming a cliché, but Tax professionals really must prepare for a ‘New Normal’.

Today we will examine:

• The significant changes affecting the corporate landscape, and how finance and tax professionals

can best support businesses through the forthcoming recession

• How to prepare for the inevitable increase in digital tools to maximise public revenue collection

• Why accelerating e-invoicing and compliance automation is one of the best steps a company can

take right now

In a survey we are about to close, we are seeing 73% of tax professionals say the diversity of country-

specific digital VAT mandates and systems is one of the greatest challenges for the next 5-10 years Only

27% are ‘Very Confident' they can keep up with the changing tax landscape

Building resilience with a winninge-invoicing and digital compliance strategy

A Gordian knot?

Tax as a problem

1

2

Agenda

3 Tax as part of the solution

A Gordian knot?1

Challenges

Manual Processes

Bad Data

Taxdigitization

point solutions

Missedautomation

opportunities

REDUCED COMPETITIVENESS

AND RESILIENCE

MASSIVELY COMPLEX ERP MIGRATION

How can we break the vicious circle?

Tax can be a catalyst rather than a drain on your digital transformation

Manual Processes

Bad Data

CTC point solutions

Missedautomation

opportunities

Automate compliance and tax-relevant processes now

Create a positive feedback loop to improve data and

trading partnerrelationships

Stay compliant in all countries on your terms,

don’t let tax dictatesolution choices

Maximize supply and demand chain automation

Tax as a problem2

An epic battle is brewing in the cloud

I want borders, taxes, control…

Give me global markets, efficiencies

Journey to Continuous Transaction Controls Trend 1

A Radical Shift in Taxability Jurisdiction Globally

Impact on Indirect Tax Reporting Complexity

Imp

act

on

Tax

Det

erm

inat

ion

Co

mp

lexi

ty

ORIGIN

DESTINATION

Trend 2

SimplifyEnforcement

PLATFORM LIABILITY

Control Digital Data from the Source

CONTINUOUS TRANSACTION

CONTROLS (CTCs)

Combat E-Commerce Base Erosion

DESTINATION PRINCIPLE

Compliance responsibility is gradually transferred from taxpayers to transactional platforms

E-Invoicing

Tax DeterminationReporting

Tax Authorities Increasingly Focus on Aggregators Trend 3

E-Commerce Marketplaces

Payment Service Providers

Express Carriers

B2B Networks

Continuous Transaction Controls – basics

Emerging CTC flavours

CLEARANCE

PUBLIC

PROCUREMENT

NATIONAL E-INVOICING

FRAMEWORK

CONTINUOUS

REPORTING

‘OWN THE

NETWORK’

Europe

Asia

SouthAmerica

North America

CTCs continue to evolve

supplier buyer

CTC

platform

Business transaction

Classic CTC model

supplier buyerCTC

platform

Emerging ‘own the network’ CTC model

(Turkey, Italy, Russia…plans in Saudi Arabia, Jordan)

Profound Business and System Impact

COMPLIANCE REGIMES: 2000 EVOLUTION FROM POST AUDIT TO CLEARANCE

Post Audit/uncategorized

Clearance/CTC

In immediate transition/dual regimes


Clearance/CTC




Clearance/CTC


COMPLIANCE REGIMES: 2020EVOLUTION FROM POST AUDIT TO CLEARANCE


Clearance/CTC



Sovos LATAM Coverage:Global VAT and Reporting

Mexico

• E-Invoicing Outbound (CFDI)

• E-Invoicing Inbound (CFDI)

• Pagos Complemento Outbound

• Pagos Complemento Inbound

• COMEX Complemento

• Leyendas Fiscales Complemento

• Hidrocarburo Gastos Complemento

• Traslados

• eContabilidad

Costa Rica

• E-Invoicing Outbound

• E-Invoicing Inbound

Peru


• E-Receipt Outbound

• E-Receipt Inbound

• Guia de Remision

• Comprobante de Retension

• Managed Services

• VAT Return

Brazil*

• E-Invoicing Goods (NFE) Outbound

• E-Invoicing Goods (NFE) Inbound

• E-Invoicing Services (NFS-e) Outbound

• E-Invoicing Services (NFS-e) Inbound

• E-Invoicing Delivery (CTE) Inbound

• E-Receipts (NFC-e) Outbound

• SPED Reporting

• REINF Reporting


Ecuador



• Comprobante de Retencion

Argentina

• E-Invoicing Outbound (CAE)

• E-Invoicing Outbound (CAEA)

• E-Invoicing Outbound (COT)

Colombia





• VAT Return

Chile




• Guia de Despacho

• Cesion de Factura


Uruguay




• Resguardo

• Daily Reports

* Files for non-SAP customers in Brazil:

* E-Invoicing Delivery (CTE)Outbound

(non-SAP only)

* MDFe Outbound (non-SAP only)

CONTINUOUS

TRANSACTION

CONTROLS

E-Invoicing

Periodic

Reporting

POST

AUDIT

Indiainvoice

clearance unique ID

Post Audit e-Invoicing

Clearance E-Invoicing

(LATAM, Italy,

Turkey)

HungaryReal-Time Reporting

Turkey E-Ledger

Mexico E-Accounting

Norway, Poland,

France and other SAF-TUK MTD

How can you survive the CTC chaos?

Pressure to use disparate local

solutions and outsource

providers

REGULATORY CHANGE ACCELERATES

• Duplicative functionality

• Setback in B2B automation

• Opportunity cost digital transformation

• Vendor management overhead

• Disparate security, liability, SLAs

• Unproven point solutionsCO

ST

RISK

Point solutions are an insidious poison for your business

REGULATORY CHANGE ACCELERATES

Adoption of modern,

global VAT strategy

Pressure to use disparate local

solutions and outsource

providers

Supports digital

transformation

Reverses digital

transformation

Stay in control of

costs and compliance

!Uncontrolled costs

and compliance

Tax as part of the solution3

1990 202020102000

Dig

ital

Inn

ova

tio

n

Audit Capability

Deficit

Tax digitizationdisruption

A WinningStrategy

Private Sector

Tax Administrations

TAX ADMINISTRATIONS

ERP & otherback-end systems

Own ARtransactionalsystems

Buyers’ AP transactionalsystems

Own APtransactionalsystems

Suppliers’ AR transactionalsystems

Local andFunctional

vendors

DirectSuppliers

Local andFunctional

vendors

IndirectSuppliers

1

6

8

7

4

5 5

SmallCustomers

LargeCustomers

3

2

TAX ADMINISTRATIONS






1

Brownfield

Move across all the configurations and

customizations aimed at decentralized ‘compliance’

in the pre-CTC world:

• Substandard quality & controls

• No ability to evolve to transactional compliance

Greenfield

Concerned that bad data will slow digital transformation and pollute core system upgrades?

Don’t delay but advance invoice & compliance automation

to overhaul data quality before getting started

TAX ADMINISTRATIONS

Erp & otherback-end systems





2

PERIODIC REPORTS

E-AUDIT FILES

(e.g. SAF-T)

• Improve visibility & control• Manage deadlines • Respond to requests• Standardize processes• Assign distinct duties• Drive accountability• Optimize use of resources• Stay current with changes to

regulations, schemas, forms• Handle corrections with full audit trail• Validate data• Correct errors / omissions• Avoid ‘surprises’• Scale across many national

jurisdictions

CLASSIC COMPLIANCE CHALLENGES

Digital Link requirements (data quality)

Navigate reporting vs operational invoicing

Blurring line direct vs indirect tax

Manuallycleanse

dataBad Data

Paper

Manual

Small TPsTax reporting

Opportunity with reporting automation

Modern tools

Bad DataPaper

Manual

Small TPsTax reporting

Dashboards

Reports

Quality controls

Audit trails

Reconciliation


Modern tools

BetterData

Paper

Manual

Small TPs

Smoother CTC

transition

Dashboards

Reports

Accelerate

automation

Automate controls


TAX ADMINISTRATIONS






Local andFunctional

vendors

3

Choose the software (SaaS)

vendors that best support

your business

Ensure consistency of

compliance approach,

auditability and control

Cloud applications are great

BUT

Multi-tenant models make you fully

dependent on the vendor’s

compliance assurance

Destination principle

Software vendor readiness

Chaotic regulatory change

E-Commerce is increasingly different

2021

Payment data triangulation

Data completeness

Software vendor readiness

Original invoice duplicates

Make sure to review your EDI solutions

Country-specific

Process-specific

Sector-specific

B2B Transaction Automation Solution Categories

Common definitions

Scope agreement – countries & processes

Who monitors, implements, ensures?

Take Control of the Transaction Management Vendor

Conversation

Applicable requirement categories

DRIVE SUSTAINABLE

AND RESPONSIBLE

AUTOMATION

TAX ADMINISTRATIONS






Local andFunctional

vendors

4

Diverse AP Systems & processes

Supplier onboarding, ordermanagement, catalogue,

spend management, interop

Business Networks

AP automation

T&E

Middleware

EDI/IB

EIN/P2P/Supplier portal

Clearance, B2B2G

SUPPLIER(S)

Scan OCR

Map

Invoice approvalworkflow

Two orthree-waymatching

Errormgmnt

Pay

Dynamicdiscouning

etc

Global XML

Structured mandatory XML schema

Post Audit EDI

Intra-group

E-Receipts/tickets

Paper/PDF B2C receipts

PDF PA B2B

Paper B2B

Book

ORDER, GRN / DELIVERY NOTE

BUYER

Post-Audit and Common AP Indirect Tax Requirement Types

20+ indirect tax requirement categories

each different per country

Clearance Country AP Indirect Tax Requirement Types

BUYER



Business Networks

AP automation

T&E

Middleware

EDI/IB


Clearance, B2B2G

SUPPLIER(S)

Scan OCR

Map



Errormgmnt

Pay

Dynamicdiscouning

etc

Post-Audit and Common AP Indirect Tax Requirement Types Clearance Country AP Indirect Tax Requirement Types

Global XML


Post Audit EDI

Intra-group

E-Receipts/tickets


PDF PA B2B

Paper B2B

Book


Exclusive digital archiving of original paper invoices

Scanning reliability rules

Integrity & authenticity rules

Archiving rules

Starting full digitization with compliant archiving now can remove a barrier to

procurement and supply chain automation

BUYER



Business Networks

AP automation

T&E

Middleware

EDI/IB


Clearance, B2B2G

SUPPLIER(S)

Scan OCR

Map



Errormgmnt

Pay

Dynamicdiscouning

etc

Post-Audit and Common AP Indirect Tax Requirement Types Clearance Country AP Indirect Tax Requirement Types

Global XML


Post Audit EDI

Intra-group

E-Receipts/tickets


PDF PA B2B

Paper B2B

Book


TAX ADMINISTRATIONS






DirectSuppliers

IndirectSuppliers

5 5

SmallCustomers

LargeCustomers

Untrained admin, procurement and sales staff

VAT expert sign-off for trading partner

portal terms

Compliance interoperability with your B2B

automation solutions

IMPROVE

CONTROLS,

AUTOMATION

AND DATA QUALITY

TAX ADMINISRATIONS






6

DirectSuppliers

IndirectSuppliers

SmallCustomers

LargeCustomers

Keep control over potentially

critical BEPS evidence

Ready your systems and

processes for a world of

CTCs

TAX ADMINISTRATIONS






7DirectSuppliers

IndirectSuppliers

SmallCustomers

LargeCustomers

CTCs turn the table on businessesEvidenceCompliance

Archiving: from must-do to must-have

Ability to reconcile & defend becomes business-critical

Multiple access points

Multiple compliance

approaches

Multiple contracts

TAX ADMINISRATIONS






8

DirectSuppliers

IndirectSuppliers

SmallCustomers

LargeCustomers

Tax determination:

from hygiene factor to operational necessity

CTC

IMPROVE

CONTROLS,

AUTOMATION AND

DATA QUALITY

How do you do from vicious to virtuous cycle?

Tax & IT partnership to lead is indispensable

Design policies & practices

1

Get executive buy-in

2

Train & coach other functions

3

Run your own assessment

Stakeholder examples

• CFO/CPO/CIO

• Accounting (AR/AP)

• Invoicing or billing process owners

• IT and security

• Legal

• (Indirect) tax

• Supply chain

• Procurement

• E-business or e-commerce leaders

• Customer service

• EDI

• Head of Sales

• Shared service center leaders

…and perhaps a few unexpected ones e.g.

• HR

• Public/government affairs

• Corporate governance

Gap Analysis

Business Systems and Processes:

1. ERP(s) and other core systems

2. On-premise and cloud AR and e-commerce platforms

3. On-premise and cloud AP systems

4. Periodic and continuous VAT reporting

5. Large suppliers’ and customers’ portals you get onboarded

onto

6. Intra-group invoicing

7. Fragmented archiving approaches

8. Tax determination

Regulatory Trends:

1. Indirect tax reporting (B2B, B2C)

2. E-Invoicing/Billing

3. E-Archiving

4. [B2G e-invoicing mandates]

Thank you.

Get in touch with us [email protected]

mailto:[email protected]

Next From sharedserviceslink

www.sharespace.digital

January 23rdJanuary 16th January 30th

Documents

Presenters · 2020. 6. 11. · Context Finance and Tax professionals are used to regulations evolving all the time, but 2020 is changing everything. It’s becoming a cliché, but