KPMG's Medical Device Excise Tax Services · Medical Device Excise Tax and Technology Team Adam...
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ACCOUNTING METHODS AND CREDIT SERVICES Medical Device Excise Tax Services kpmg.com
Transcript of KPMG's Medical Device Excise Tax Services · Medical Device Excise Tax and Technology Team Adam...
ACCOUNTING METHODS AND CREDIT SERVICES
Medical Device Excise Tax Services
kpmg.com
Under the MDET law, tax liabilities and semimonthly payments can be substantial for device manufacturers and importers.
• Do you have the necessary software applications and systems in place to accurately calculate and comply with this tax?
• Are you capturing and reporting the correct data, thereby reducing the risk of either underpayment or overpayment?
• Do you have the necessary information and documentation required in case of an IRS audit?
Computing the Medical Device Excise Tax (MDET) and documenting positions can be a complex undertaking. Many taxpayers have yet to develop the necessary compliance processes—such as calculating and supporting the tax base, including discounts, rebates, refunds, and allowances; determining and supporting exemption eligibility; and providing proof of further manufacture and proof of exportation. In addition, companies may need to update their IT systems to handle frequent tax computations and track purchases.
KPMG LLP’s (KPMG) cross-disciplinary team can help with your MDET challenges—from the complex substantive issues of the tax to the use of technology resources. Our skilled tax professionals, many with backgrounds at the IRS, can review your positions and documentation and help remediate areas of risk. In addition, the KPMG MDET Processing Tool, our proprietary Web-based technology, can help you accurately calculate and manage your potential tax liabilities. And if the need arises, we can help you prepare for an IRS examination and represent you before that body. Our goal is to help companies meet their MDET tax compliance responsibilities and account for what devices are taxed under this law which, in turn, can help reduce demands on internal resources.
KPMG’s MDET team can also provide a broad range of other MDET-related tax services, including assistance with:
• Determining the tax base for each device on a transactional level
• Planning and implementing compliance-related systems
• Preparing quarterly federal excise tax returns and preparing refund claims
• Preparing and submitting IRS ruling requests related to constructed sale price issues, providing thought leadership, education, and technical assistance to stakeholders.
Medical Device Excise Tax Services
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KPMG’s MDET Team
TAX CONTROVERSYRESOURCE TEAM
TRANSFER PRICING TEAMAssists you with collecting evidence to support the sale price used as the MDET tax base.
Assists with IRS MDET examination and appeals processes. Provides experience with alternate dispute resolution techniques to allow for controversy resolution without resorting to expensive litigation.
FEDERAL TAX TEAM
TAX TRANSFORMATION AND TECHNOLOGY TEAM
Reviews your MDET positions, Forms 720 and work papers, and existing documentation that supports your positions. Summarizes our findings and provides recommendations regarding areas of risk and opportunity, and works with you to develop supporting documentation as needed.
Determines your present systems capabilities, recommends how information should be reported, and informs you on what additional enhancements would be needed to track the necessary information to comply with the MDET.
WNT Federal Excise Tax PracticeAssists all KPMG MDET teams with complex MDET issues throughout an engagement, including IRS controversies.
KPMG’SMDET TEAM
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A Combination of Analytics and Proprietary TechnologyProviding a detailed analytic review of a company’s products, distribution model, systems, and data, we can help to identify:
• Which products are covered under the law and which meet the retail exemption standard
• If/how the constructed sale price rules apply to retail and intercompany sales
• Whether a company exports taxable medical devices or sells taxable medical devices for export
• If a company offers any rebates or other price readjustments to its customers and how to appropriately account for such adjustments.
Our analytic review framework can also provide a foundation for future enterprise-based solutions, including:
• Tax Logic – defining tax calculation mechanics behind the MDET
• System Profile – mapping sources and locations of data
• Data Analysis – assessing data quality and bridging data gaps
• Design – designing a tax-based approach that leverages existing client systems.
KPMG’s MDET team can also provide a broad range of other MDET-related tax services, including assistance with:
• Determining the tax base for each device on a transactional level
• Planning and implementing compliance-related systems
• Preparing quarterly federal excise tax returns and preparing refund claims
• Preparing and submitting IRS ruling requests related to constructed sale price issues
• Providing thought leadership, education, and technical assistance to stakeholders.
Web-Based MDET Processing ToolJust as important as the analytics is the technology supporting those analytics. Obtaining and analyzing data to support semimonthly tax payments is a challenging component of MDET-related tax compliance. Automating the process can help analyze transaction level data and accurately calculate the amount owed, potentially saving your company hours of manual labor.
KPMG’s MDET team designed and built a sophisticated Web-based application—KPMG MDET Processing Tool—to help companies accurately calculate and manage their potential MDET liabilities, thus potentially saving hours of manual resources.
This hosted application, accessible via the internet, is a Web-based processing system that enables companies to take advantage of a sophisticated, enterprise-level solution without the burdens of building, hosting, or maintaining an in-house system.
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Manage Tax Payment Periods | Displays and allows the user to update the status of current and prior quarter periods
Utilizing a company’s transaction level information and data from its enterprise resource planning and/or other financial and operating systems, the KPMG MDET Processing Tool helps analyze and calculate the appropriate level of tax associated with the sale of each device.
To do this, complex business rules are embedded within the KPMG MDET Processing Tool, which helps define how each transaction should be treated and:
• Identifies whether the device should/should not be taxed
• Accounts for the original amount of the invoice and any associated rebates
• Calculates the appropriate amount of MDET on each device
• Calculates tax refunds available based on tax law.
Key features:• A system that is ready to process company data after configuration and
provisioning have been completed based on the company’s requirements
• Secure data center and software environments—utilizing the latest industry hardware and software
• Leading industry standard security, backup processes, and data center stability
• Consistent underlying computing and tax methodologies
• Routine updates to stay current with changes in the tax law, IRS interpretations, and court rulings
• Configurable framework to support a variety of tax positions
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MDET Tax Preparation Summary Report | Provides key values to prepare quarterly excise returns and estimate payments
MDET File Upload Status Grid | Enables users to view the status of each data file upload and determine if file uploads were successful
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All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.
© 2014 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. NDPPS 256725
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
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Contact us
To find out more about KPMG’s MDET Services, please contact:
Medical Device Excise Tax and Technology Team
Adam UttleyPartnerT: 213-593-6732E: [email protected]
Tim WongPartnerT: 408-367-2202E: [email protected]
Michael FranklinSenior ManagerT: 312-665-1309E: [email protected]
Tax Controversy Resource Services Team
Sharon Katz-PearlmanPrincipalT: 212-872-6084 E: [email protected]
