Headline Verdana Bold Managing tax Balancing current challenge with future promise The EYE, Amsterdam, 30 November - 1 December 2016
Headline Verdana BoldManaging taxBalancing current challenge with future promiseThe EYE, Amsterdam, 30 November - 1 December 2016
Realising the benefits of integrated process delivery
David Wright, Deloitte UKLaurent Nowicki, Deloitte Belgium
3
Introduction: why integrate these processes? 4
Components of the tax function 5
Integrated statutory accounting and corporate income tax process 6
Defining roles and responsibilities 12
Supporting technology 15
Contents
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Statutory accounting and corporate tax reportingWhy integrate these processes?
• Harmonised end to end compliance process
• Integrated workflow management
• Simplify data management
• Reduce lead-time and efforts
Process efficiency
• Greater visibility of filing status
• Transparency of filings through generally accepted accounting principles (GAAP) to tax reconciliations
• Increased data consistency
• Increased quality of filings
Risk management
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5
Components of the tax function
Key stakeholders
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Defining the components of the tax function
Compliance
• Master data management
• Tax return data
• Local statutory accounts
• Return preparations
• Compliance outsourcing
• Transfer pricing (TP) documentation preparation
Accounting and reporting
• Financial close for tax
• Reconciliations
• Indirect tax
• Accounting analyses for tax
• Management reporting on tax
Tax strategy
• Tax objectives
• Tax strategy
• Technology strategy
• Tax risk framework
• Process determination
Operational risk management
• Controls operation and internal audit
• Technology tools
• Compliance manual
• Tax risk register
• Tax audit support
• Tax litigation
Organisation and resources
Automation and technology integration
Operational Strategic
More likely in shared service centre (SSC) More likely in tax
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7
Integrated statutory accounting and corporate income tax process
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8
People
International and multidisciplinary team
Strong accounting and tax expertise
Project management specialists
Process
Standard and scalable processes
Standardised deliverables
Central management and governance
Technology
ERP andmiddlewares
Specific production tools
Global entity management tool
What is key to build an integrated statutory accounting and corporate tax process?
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Components of a standard end to end compliance processStatutory accounting and corporate tax reporting
• Standardisation of processes
• Fully documented: audit trail
• Flexible and scalable
• Standardisation of deliverables
• Support local requirements
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An integrated, state of the art, statutory accounting and corporate tax process
• Management of deadlines
• Governance
• Review non-routine business events
• Preparation and integration of material provided by client (PBC): Stat Acc., CIT, Audit
Q4 working session meeting
• Provide non-financial data • Business information update
• Management of external audit and statutory process (group and statutory)
• Clarify/confirm ad hoc matters
• Review and approve • Submit Statutory
Financial Statements (SFS) and CIT return
• Reporting on statutory process and continuous process improvement (CPI) initiatives
• Automate data extraction for Enterprise Resource Planning (ERP) reports (Trial Balances (TBs), General Ledger, Fixed Assets, Re-valuation reports…)
• Access financial information throughBalance Sheet reconciliation (middleware)
• Preparation of Mgmt. to Local GAAP and tax adjustments
• Preparation of local GAAP TB, FinancialStatements and equity reconciliation
• Prepare Local Tax Provision (LTP),Corporate Income Tax Return (CITR) and Return to Provision (RTP)
• Provide support to reviewers
• Store on GMT
• Audit procedures• Provide proposed audit adjustments • Review and
approve
SS
C /
RC
OE
Delo
itte
Au
dit
or
Su
pp
orti
ng
Tech
no
log
y
Data
collection
Data
validation
Data
processing
Deliverable
drafting
Review and
sign off
Submit and
archive
Management
reporting
Process
planning
SFS and CIT specific toolsERP/middleware
Global management tool
Integrate country by country (CBC) additional data points in PBCs e.g., tax cash and income by party (IC/external)
Review CBC and TP ratios
Consolidate CBC/ TP reports
E-filing softwareDeloitte Conversion Tool (DCT)
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11
Global management system
Key areas of improvement
• Harmonise deliverables and reconciliations across all jurisdictions/Legal Entities (LEs)
• Reduce lead-time
• Include Tax and TP teams (Process design and RR)
• Deploy a global data management platform to monitor filings and access data
Efficient end-to-end statutory accounting and corporate tax process:
• Combined stat and CIT process
• Integrates all stakeholders
Leverage technology:
• Automate core data extraction
• Leverage middleware systems
Standardisation of processes and deliverables
• Standard deliverables
• Reconciliation GAAP to Stat to Tax (tax bridge)
Opportunities
• Harmonise production tools
• Connect output to Deloitte CbC Digital Exchange (CDX) (TP)
• Leverage available multi-years statutory accounting and CIT data to perform analytics
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12
Defining roles and responsibilities
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13
Key stakeholders
Defining roles and responsibilities
ON-SHORE/VIRTUAL− Oversight and control− Risk and opportunity
FAR-SHORE/FINANCE AND ACCOUNTING (F&A)− Language independent− Rule based processing
ON-SHORE− Not involved− Involved in high complexity
business/jurisdictions− Clustered/regional
SSC
CoELocal Finance
Tax
NEAR-SHORE CENTRE OF EXCELLENCE (CoE)− Language dependent− Tax technical
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14
Map standard process to your own organisation
Defining roles and responsibilities
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15
Supporting technology
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16
Technology landscape
Integrated statutory accounting and corporate income tax
Core ERP
Oracle/SAP…
Consolidation System
Oracle Hyperion Financial Management (HFM)
2
IFRS / USGAAP
Local GAAP
1
Complex Jurisdictions*
Mgmt. to Statutory ledgers
Middleware
4
All countries
Tax Provision
Middleware
3
BS rec’n
Middleware
Mgmt. Reporting
Ad hoc reporting layer
6
SFS and CIT returns
Local Tools
5
Global management tool
CBC
SFS CITR
Single recipient for all statutory data and source of cross-border standardised reporting
US 10K
ConsoSFS
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17
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 standardisation
• Improve consistency
• Minimise ongoing report maintenance
©2016. For information, contact Deloitte Touche Tohmatsu Limited.
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Faculty
David Wright, Deloitte UK
Partner
Laurent Nowicki, Deloitte Belgium
Partner
+44 20 7303 4641
+ 32 2 800 25 11
©2016. For information, contact Deloitte Touche Tohmatsu Limited.
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