KPGM’s TaxOne Event

KPGM’s TaxOne Event

TaxOne – Simplify the

managing of your tax

processes

Zurich, 20 May 2014

kpmg.ch

TaxOne

Platform

Overview

2 © 2014 KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with KPMG International

Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

Do your clients face the same challenges?

Increased

complexity of global

business models

Lack of tax

information at

headquarter and lack of

transparency in tax

processes

Tight closing

deadlines create condensed

cycle times for tax

information management

Financial Controllers

have different degrees of

understanding in regard to

tax requirements

Global tax complications such as

working with multiple entities, currencies, tax

legislations and multi-level tax processes

Legal requirements are on the

increase but headcount in the tax

department continues to decrease

Tax personnel spend a significant

amount of time manually gathering and

validating data and spreadsheets – they

have minimal or no time to carry out any

value-added analyses



TaxOne

Reporter TaxOne

Planner

TaxOne

Risk Manager

TaxOne

Transfer Pricing

Data Manager

■ Tax calendar & dashboard

■ Monitoring of tax risk and compliance process and tax audits risks

■ Overview of tax payments, tax audits, tax loss carry forwards, tax consulting costs, etc.

■ Archiving of tax-relevant documents

■ Calculation of current and deferred taxes according to IFRS and local GAAP as well as tax rate reconciliation

■ Consolidated analyses for the individual reporting units

■ Supply of data for notes in various reports/ disclosures in line with IAS 12

■ Forecast for different tax positions

■ Multi-year planning (e.g. ETR)

■ Tax audit simulation

■ Tax Controlling

■ Global solution for transfer pricing documentation

■ Centrally monitor and review contents of the TP documentation

■ Supports both centralized and decentralized approach

TaxOne – An all-inclusive Tax Information Management Solution

TaxOne

Contract Manager

■ Corporate governance of contracts

■ Transparency on contractual relationships

■ Pivot reporting and full-text search

Increasing level of automation enhances efficiency and quality

Transparency

on tax risks and

compliance

Tax in the

media



Why you should be concerned about Tax Compliance & Governance

Tax function

Increasing demand to monitor tax risks

Transparent tax processes

Tax systems under review

Threats to company

reputation

Change in political climate

Stricter conditions on an international

level

Increasing fiscal deficits



Requirements for the Organization of a Tax function

• Define the tax function’s tasks and goals

• Define and document a tax risk strategy

• Identify and validate tax risks

• Define transparent tax processes and

document the results

• Establish a tax-internal control system

• Communicate tax compliance and

governance culture to all stakeholders

• Define interfaces to all other relevant

departments (e.g. Finance, Accounting,

Controlling, Legal and Compliance)



Our Solution – TaxOne Risk Manager

• The dashboard provides you with an ad-

hoc top-down overview and reports on your

key figures and statuses, such as

deadlines for filing tax returns, tax

payments and tax audit risks

• The tax calendar provides an overview of

all deadlines

• Monitoring of the status of each tax risk

position indicated in red, amber or green

• Sophisticated data upload and filing

functions for relevant tax documents

• Automatic reminder functions that send

emails to those responsible when pre-

defined deadlines are reached

• Flexible definition and monitoring of tax

processes



Setting the Scene

Holger Eilers

Acreda GmbH, German entity

Responsible for tax risk and

compliance at a local level

Christoph Funke

Ketinax International AG,

Headquarter

Responsible for group

tax risk and compliance & treasury



Benefits of using TaxOne Risk Manager

● Entry and monitoring of tax compliance issues at entity and group level

● Monitoring of deadlines with indications (escalation levels) with automatic reminder emails

● Grouped overview on single topics (Tax Compliance, Tax Audits, Tax Payments, Consulting Costs)

● Easy identification of challenging areas

● Group-wide overview of future and past tax payments/reimbursements

● Monitoring of deadlines with indications (escalation levels) and automatic reminder emails

● Entry and monitoring of tax audit risks at entity level

● Group-wide overview of total of tax risks and potentially necessary adjustments to provisions (Tax transparency)

● Freely definable process steps and responsibilities

● Escalation concept and possibility to attach documents

Transparency in tax

compliance at both global and

local level

Monitoring of enterprise-wide

tax risks and obligations

Top-down dashboard view on

essential tax areas

Efficient managing of total tax

contribution

Flexibility in defining and

monitoring ad-hoc processes

Efficient and

integrated

TaxOne reporting

& planning



Challenges in Tax Reporting

Tax function

Low level of automation

Complex business models

Coordination with Accounting

Fulfillment of IAS12 reporting requirements

Tight deadlines

High risk of data inconsistencies

Lack of transparency in

regard to key factors

The pressure is on the tax function



TaxOne Reporter & Planner

• Pool of data is consistent, thanks to a

standardized tax calculation and reporting on

ONE web-based platform

• Data is highly transparent and readily

available

• The centralized database makes local entity

entries immediately available group-wide

• Key positions and how the develop is easily

retrievable both at group and entity level

• Fiscal relationships are automatically taken

into consideration (automatic transfers)

• Data quality and transparency is higher

• A pool of data that can be used for Notes to

financial statements according to IAS 12 is

automatically generated



TaxOne Setting the Scene

2013 year-end reporting for Accreda GmbH Monitor and review 2013 consolidated group

reporting

Correct entries for final submission Review corrections and create group reports

Christoph Funke

• Ketinax Group, Headquarter

• Responsible for group-wide tax reporting

Holger Eilers

• Baida, Singapur

• Responsible for tax reporting at local level



TaxOne Benefits of using Reporter & Planner

● Develop, utilize and valuate tax losses

● Automatically consider balance sheet differences that are income statement-related

● Calculate deferred taxes on balance sheet differences and tax losses

● Benefit from the automatic true-up functionality

● Customizable import interfaces (manual or automatic) to upstream systems:

- Import of balance sheet and p/l account values

● Customizable export interfaces (Manual or automatic) to downstream systems possible

- e.g. for validation with booked values on consolidation system

● Local entity entries immediately available through centralized database

● Transparent, detailed group and entity-based overview on the development of key

positions

● Automatically generate reports required for your tax notes (e.g. Reconciliation & ETR) and further relevant reporting figures

● Automatically generate a pool of data for Notes to financial statements according to IAS 12

● Benefit from customizable reporting groups

● Three planning types are available (multi-year planning, forecast & tax audit simulation)

● Automatic import of values from TaxOne modules and from external systems

Calculate and report current

and deferred tax consistently

and in a standardized way

Automatically generate a pool

of data and reports for tax

notes

Interlink it with upstream

systems

Increase the quality and

transparency of your data at

local and group level

Benefit from a fully integrated

tax planning

A structured

Transfer Pricing

documentation



TaxOne – Transfer Pricing – General areas that needs attention

There are hence four areas that ask for your

continuous attention:

● A reasonable design and set-up of the

intercompany relations and trans-actions

● Good paperwork such as intercompany

agreements to govern, implement, translate

and document these relations

● The recurring preparation of transfer pricing

documentation reports

● The effective monitoring of the transfer

pricing for risk management purposes



TaxOne – Module TaxOne Transfer Pricing Data Manager – Design Principles

● For most countries there is today a historical track record how tax authorities deal in practice with

transfer pricing documentation requirements. Based on this experience there is a clear tendency

that tax authorities are much more focused on specific transfer pricing information and are not any

more predominantly interested in a large quantity of information

● This gives space to taxpayers to streamline their documentation reports and establish lean and

more efficient documentation approaches. Such documentation approaches usually show the

following features which are also the design principle of the TaxOne Transfer Pricing Data Manager:

• High flexibility through modular structure

• Information is only used once in order to avoid double work and thus inconsistencies

• Central coordination and local customization

• Focus on penalty protection and shift in burden of proof



TaxOne – Module TaxOne Transfer Pricing Data Manager – Structure

Level 1 – Documentation Period

● Define documentation period

● Select group entities for TP

documentation

Level 2 – Master Data

● Define value chains & transaction

groups

● Attribute functions and risks to roles

and roles legal entities

Level 3 – Edit documentation

● Add specific information for each

transaction

● Transfer pricing analysis including

arm`s length test for each

transaction / legal entity



TaxOne – Benefits of using Transfer Pricing Data Manager

● Support in the preparation and defense of the transfer pricing documentation in

local audits

● Reduce the risk of penalties and income estimation because of violations against

legal obligations to prepare documentation

● Efficient handling of documentation workload by relying on structured information

entry screens, templates and default texts

● Standardized documentation processes, which consider data entered regarding

previous periods

● Documentation completeness check on a company level, value chain level and

transaction level (traffic light system)

● Available reports enable a risk oriented review considering transaction amounts

and transfer pricing methods applied

● Involvement of central and local resources taking into account their specific

knowledge

● Consistency among the information provided locally is ensured by documentation

processes and central review functionalities

● Cost savings by preparing documentation or documentation elements in house

(minimization of consulting costs)

● Benefit from roll-forward functionalities in TP Data Manager that minimize

workload in future periods

Being prepared for audit

Combine central and local

knowledge and resources

Efficiency through structured

and standardized processes

Risk oriented review and risk

management

Realization of cost savings



Centralized web based

Transfer Pricing Documentation

■ Worldwide increasing transfer

pricing documentation

regulations and compliance

burden

■ Growing focus by specially

trained tax authorities on transfer

pricing

■ Finding a balance in order to be

compliant in the area of transfer

pricing but limiting the efforts and

costs internally

■ Lack to provide evidence during

tax audits especially when tax

audit covers periods some years

ago

■ Having efficient processes to

ensure group wide consistent

transfer pricing document and

reasonable compliance costs

Solution Challenges

TaxOne – Module TaxOne Transfer Pricing Data Manager – Summary

■ Realization of cost savings by

preparing Transfer pricing

documentation in house and roll-

forward functionalities

■ Being prepared for tax audits and

reduce risks of penalties and income

estimation

■ Preparation of transfer pricing

documentation possible within short-

time frame due to modular concept

■ Already existing transfer pricing

documentation can be stored and

submitted to tax authorities

immediately

■ Combine central and local knowledge

and resources and therefore ensure

consistency among the information

provided locally

Benefits

TaxOne module

TRANSFER PRICING

DATA MANAGER

§

=

Closing



TaxOne

Reporter TaxOne

Planner

TaxOne

Risk Manager

TaxOne

Transfer Pricing

Data Manager

■ Tax calendar & dashboard

■ Monitoring of tax risk and compliance process and tax audits risks

■ Overview of tax payments, tax audits, tax loss carry forwards, tax consulting costs, etc.

■ Archiving of tax-relevant documents

■ Calculation of current and deferred taxes according to IFRS and local GAAP as well as tax rate reconciliation

■ Consolidated analyses for the individual reporting units

■ Supply of data for notes in various reports/ disclosures in line with IAS 12

■ Forecast for different tax positions

■ Multi-year planning (e.g. ETR)

■ Tax audit simulation

■ Tax Controlling

■ Global solution for transfer pricing documentation

■ Centrally monitor and review contents of the TP documentation

■ Supports both centralized and decentralized approach

TaxOne – An all-inclusive Tax Information Management Solution

TaxOne

Contract Manager

■ Corporate governance of contracts

■ Transparency on contractual relationships

■ Pivot reporting and full-text search

Increasing level of automation enhances efficiency and quality



TaxOne – Key Benefits of an integrated Tax IT Solution

Provides a centralized repository for data, calculations, and reporting

Satisfies the auditor and Board members by having an industry-proven solution

in place for maintaining or even lowering the ETR

Delivers a common methodology across group companies

Removes duplication that can occur with a manual consolidation process

Increases quality of data by eliminating manual re-keying of data

Reduces closing cycles

Intuitive solution that is easier for staff to learn than customized spreadsheets

Minimizes reliance on previous knowledge on customized spreadsheets

KPGM’s TaxOne Event

Technology

Transcript of KPGM’s TaxOne Event