EMEATMC client conference Indirect tax - delivering best in class … · 2020. 5. 23. · EMEATMC...

EMEA TMC clientconferenceIndirect tax - deliveringbest in class compliance ina Global business services(GBS) environmentThe Crystal, London9-10 June 2015

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• The Current landscape

• The push to centralisation

• Stakeholders & governance

• Components of compliance

• Executing on a strategy

Agenda

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In Deloitte’s 2014 indirect tax clientsurvey, our clients identified indirect taxcompliance as their number 1 priorityarea.

Only 30% of respondents to our globalcompliance survey were happy that theircentralised compliance processes wereefficient.

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4

The currentlandscape

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Pressures on indirect tax teams

VAT is a big number

Imposed risk managementregimes such as Senior AccountingOffices (SAO)

Public scrutiny and boardroom attention

Behaviour-based penalty regimes

Desire to “do more” withthe same resources

New resourcing and deliverymodels such as shared servicecentre (SSC/GBS)

Increasingscope of‘indirect’

taxes

More to manage alongside greater scrutiny over performance and compliance

The taxteam

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Operating model evolutionThe evolution of compliance strategy from discrete functional-and country-based models to integrated, global and cross functional services

Limited automation Medium automation

Sharing of tools and processes

Local Regional Global

Maximum automation

One function Multi-function

Little sharing Full integrationCo-location

Transactional and advisory

Two to three functions

Transactional

SSC geographical scope

Degree of automation

Functional scope

Degree of functionalintegration

Degree ofvalue add

Outsourcing model Decentralised Coordinated, consolidated Centralised, Integrated

Prepared by separate localcountry teams

With ad-hoc use of advisors oncountry by country basis

Tax and statutory accountsprocesses aligned

Co-ordinated global outsourceworking with SSC

Shared service team prepares taxreturns and statutory accounts

Local support for quality assuranceand specialist input

Tax and statutoryaccounts

Operating model

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7

The push tocentralisation


Market research - compliance focus

Relative importance of factors in %

Current global compliance drivers for organisations and their management

* Global tax management consulting (TMC) market research conducted by Deloitte – December 2014



(% Happy)

Satisfaction with the current model for managing all global compliance

Delivered andmanaged locally

Delivered ocally,managed centrally

Delivered andmanaged centrally

Method 1Decentralised

Method 2Co-ordinated

Method 3Centralised




21% 14% 7% 5%

Indirect taxreturns andpayments

Global taxprovision

Statutoryaccounts

Corporate incometax returns and

payments

Specific issues…

Does not perform as well for…

• Lack of control;monitoring; management

• Complications of localknowledge

• No central strategy


• Lack of communicationfrom external partners

• Lack of skills/ expertise


• Less focus on theseareas

• Problems with datacollection/ integration


• Lack of communicationfrom external partners

• No central strategy

• Lack of skills/ expertise

Satisfaction with the current model for managing all global compliance



Market research - key messages

• More centralised operating modelsbeing deployed but the degree of‘enthusiasm’ varies by process

• Increased use of selective outsourcing tocomplement the in-house team and as acatalyst for wider improvement or eventransformation

• The focus is now on more consistentglobal processes and quicker, simplerdelivery, often through the better use oftechnology



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Stakeholders& governance


Who are your stakeholders?

Indirect tax

Taxauthorities

Internalaudit

Regulators

Businessunit leadersand finance

staff

Externalauditors

Widertax

function


• In some respects centralised compliance makes stakeholder managementeasier but it does demand more formality

Satisfying your stakeholders

Document processesand controls for

completing indirecttax returns

Agree and publishguidelines for dealingwith tax authorities inaudits, assessments

and disclosures

Implement a processfor identifying andreviewing high risk

countries/registrations

Document and dataretention guidance

Regular review ofindirect tax affairs toquantify risk areas

Reporting keyperformance metrics


Introducing the Operating Model LayersShaping your indirect tax governance model

Level 1 –Strategicdirection

Level 2 –Key tax &reportingactivities

Level 3 –Supportinginfrastructure

Compliance strategy based onneeds of key stakeholders, clearly

communicated goals, roles andresponsibilities, governance

standards

Defined compliance processesand controls for tax and reportingactivities by business division and

function

Infrastructure which supports andmonitors compliance controls allactivities, creating visibility over

tax compliance for group taxfunction


Componentsof compliance

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The components of centralising compliance

People Knowledge Processes Technology

Local expertise

Centralisation of compliance


The right mix of peopleAn multi-disciplinary team comprising:

• Tax technical specialists

• Data management resources

• IT and Excel skillsets

• Accounting knowledge

• Project & process managers and owners

• 3rd party providers where appropriate

Nationalities Skill sets

The right mix of talents to consolidate andtest data, submit returns, adapt systemsand handle relationships with widerbusiness and local tax authorities

PeoplePeople


Knowledge is a key to success

Periodical newsletters

Strong tax technical knowledgePractical “problem solving”

experience

Innovative EMEA taxtools

EMEA tax matrix andoverviews

Updated tax informationper country

Expertise Co

mb

ina

tion

of

Su

pp

orte

db

yP

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dic

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Continuous professional training

Regular updates of knowledge databases

Knowledge

Knowledge


Reliable processesProcesses

Processes• Important to recognise what

‘compliance’ encompasses

• Preparing the return is a single step in thecycle

• Centralising compliance will surface painpoints that need to be addressed

• We’re becoming more adept at segmentingand aligning steps across processes

• Styles of process improvement lookdifferent across businesses but key stepsare often common


Technology trends

• VAT compliance technology market still evolving:

− A few more ‘international players’ although plenty of room for more!

− Differing views on how much integration with the source financial systems is needed

− Still a lot of Excel automation being offered in the market

− No solution does it all… yet

• The systems for managing the tax process, key performanceindicator (KPI) data and document management arebecoming ‘standard’ in many tax functions, but adoption andapproach vary from group to group.

ProcessesTechnology


A case in pointProcessesTechnology

People

Knowledge

Processes

Technology


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Executing on astrategy


Consider VAT’s position within the wider businessConsider VAT’s position within the wider business

Identify your key stakeholders and determine how to work with themIdentify your key stakeholders and determine how to work with them

Take stock of what technology solutions are already available in the GBS andacross your tax groups: you may have more to play with than you expectTake stock of what technology solutions are already available in the GBS andacross your tax groups: you may have more to play with than you expect

Focus on complementing and improving current processesrather than disrupting themFocus on complementing and improving current processesrather than disrupting them

Don’t overcomplicate things: it puts adoption of change at riskDon’t overcomplicate things: it puts adoption of change at risk

Technology is not a ‘silver bullet’. Sustainable improvement takes careand effortTechnology is not a ‘silver bullet’. Sustainable improvement takes careand effort

There’s more than one route to ‘best in class’There’s more than one route to ‘best in class’

Executing your strategy


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EMEATMC client conference Indirect tax - delivering best in class … · 2020. 5. 23. · EMEATMC...

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