Tax Technology: Transforming your Tax Functions · • Using technology to manage tax and business effectively is crucial for tax department in any multinational group. Use of analytics

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Tax Technology:Transforming your Tax Functions

18 December 2019

Speakers: Emily Dobbie, Maria Spiliotopoulou

Changing the world of tax

TP

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Agenda

• Introduction – why implement technology?

• Adopting & enabling tax technology initiatives

• Technology solutions for tax functions

• Tax Technology strategy & roadmap


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Introduction


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Introduction – Why implement technology to tax functions?

• Global tax administrations and other stakeholders demand tax transparency.

• Data gathering and exchange of information.

• Outlier analysis on automatically generated and visualized tax data.

• Tax is joining other enterprise functions to deploy technology and data analytics – quicker access to

accurate data.


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How to effectively adopt & enable

tax technology initiatives


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Adopting & enabling tax technology initiatives

Issues to consider:

• How much of the tax technology expertise in-housedo we have and can we rely on external consultantsto design and implement tax technology systems?

• Are current systems and databases sufficient tosupport tax technology automation?

• What is the required investment and what forward-looking tax strategy shall we pursue over the short-term (over the next one to two years) and mediumterm (5 plus years)?


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Type 1 - Tax Functionalities

Functionality Description

1. Tax Planning

Provides a link between transfer pricing policies and implementation. This

functionality allows designing and classifying transfer pricing calculation

principles by linking TP specialists’ recommendations to financial

formulas.

2. TP Documentation Allows to generate and store standard TP documents (CbCR, MF, LF),

graphics, tables, etc.

3. Tax provisioning /

calculation

Assists in reporting current and deferred income taxes and runs global tax

provision calculations, in order to calculate the due and leverage the need

for provision to be added back in the tax calculation basis.

4. Tax Compliance

Monitors the dates along with the tax planning need. Collects all the

relevant data to the formal filling of corporate tax returns and any other

forms, such as CbC reporting and VAT returns. Everything needs to be

filed according the rules (OECD, guidelines, Local legislation, MLI, etc.)

5. Tax controversy

Goes in on the tax dispute side, whether it is with local, federal, state or a

foreign tax authority. Could be stimulated by the use of mapping and

labelling document, as well as, the knowledge on the local areas where

MNE is active.

6. Customs / VAT Files the VAT returns.

7. Legal Delivers the terms & conditions for transactions between HQ and

branches.

Type 2- IT Functionalities

Functionality Description

1. Data collection

and structuring

Allows software packages users to define, collect, allocate and report data

in a standardized and automated way across multiple jurisdictions.

2. Cross-checking of

data Secure the validity of the data (might use an AI).

3. Data analytics/

data mining/

simulations

Analyses the data and run simulations. Also allows for drawing/ designing

visual representations of intra-company relationships. Data analytics start

to be an essential tool for tax administration and strategic planning.

4. ERP integration

Processes and organises financial data from all the levels of the

corporation, such as accounting. Help to match the global financial data

with data reported through tax authorities.

5. Risk exposure

management Checks the tax risk a company might have.

6. Documentation

writer Allows the creation of manuals and reports.

7. Benchmarking Automates comparable company searches and allows to achieve a higher

level of efficiency in comparable company analysis

8. Global workflow

management

Embedding of workflows into an IT platform allows for automation of

any tax/ transfer pricing process.

9. Outlier analysis Visualise the data in order to spot outliers

10. Repository

function

It is a central place in which an aggregation of data is kept and maintained

in an organized way. Could also imply some ability to selectively extract

data.

Implementation considerations

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Technologies for the tax functions


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Technologies that can have a positive impact on the tax functions

Technologies that provide solutions for the tax functions

– Solutions for:

• Compliance related solutions (Reporting and forecasting tools)

• Data extraction, data transformation and data visualization(Data integration and ERP)

• Process management (Tax workflows)

• Hosting & storage (Data warehouse/ Data market applications)


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2. Data integration and ERP


1. Compliance related solutions

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3. Process management solutions: Workflows

4. Document management: hosting & storage


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Insight to Tax technology strategy

and roadmap


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Insight to Tax technology strategy and roadmap

Outline a roadmap for tax department to:

- Prioritize- Align - Integrate

Value propositions


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Which areas of tax is your company’s main concern?


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Master File RACI Global CFO Head of Tax

Transfer

Pricing

Director

Transfer

Pricing

Analytics

Regional

finance

Local

Finance

Treasury

team

Legal

team

Preparation of

documentation- I A R C C - -

Describe Transfer

Pricing policy- I A R C C - -

Audit support I A A - - C I -

Consultancy I A A R/C - C C I

Risk

managementI A A C - C I -

Review of the

document- I A R - - - -

Sign-off on the

documentI I A R - - -


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Digitalization workflows

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Conclusion


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TPA Global – SUITE 2020

• Using technology to manage tax and business effectively is crucial for tax department in any

multinational group. Use of analytics is an essential tool for tax administration and strategic planning.

• SUITE 2020 is a platform that combines different software’s features according to the specific needs

of your business. TPA aims to offer the perfect fit-for-purpose to fulfil all your needs.

• TPA Global acts as:

• The independent party to perform/assist on “vendor selection”

• The implementation partner you are looking for – software solutions that actually work.


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Conclusion

• Tax function is the hugely data-driven, working in real time – more holistic approach on an enterpriselevel.

• Algorithms will deliver tax expertise and knowledge, robots will relieve humans manual processes.

• We need to focus on strategy, working with the machines to deliver valuable insights into business. Aroadmap need to be in place, for a smooth transition in the digitalization era.

• Tax functions achieving higher degree of efficiency through less time devoted to the manualmanipulation of source information.


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Further discussion & Questions

Maria Spiliotopoulou [email protected]

Emily Dobbie [email protected]


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TPA Global provides international businesses with integrated and value-added

solutions in improving financial performance, operational efficiency, strategic

development and talent coaching through a cross-border and cross-discipline team

of professionals which identifies the right solutions for customers and targets;

efficient and streamlined advisory and implementation processes which cut through

operational complexities across functions and borders; and superior customer

service and support which proactively anticipate the evolving needs of the clients.

H.J.E. Wenckebachweg 210 . 1096 AS Amsterdam . The Netherlands . +31 (0)20

462 3530 . tpa-global.com

The views expressed and the information provided in this material are of general nature and

is not intended to address the circumstances of any particular individual or entity. The above

content should neither be regarded as comprehensive nor sufficient for making decisions. No

one should act on the information or views provided in this publication without appropriate

professional advise. It should be noted that no assurance is given for any loss arising from

any actions taken or to be taken or not taken by anyone based on this publication.

© 2019 Transfer Pricing Associates Holding B.V. All Rights Reserved.

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Tax Technology: Transforming your Tax Functions · • Using technology to manage tax and business effectively is crucial for tax department in any multinational group. Use of analytics