TAX TRANSPARENCY…ABOUT TIME! · Tax transparency is driving the agenda of today’s Tax...

3
Article TAX TRANSPARENCY…ABOUT TIME! Public Pressures & New Legislation Public outcry on corporate tax avoidance has steadily increased, particularly in the past few years. The media has inundated a number of global multinationals with accusations of not paying their fair share of taxes in countries in which they operate. Many governments have enacted or are considering new legislation requiring heightened reporting standards. This means increasing levels of transparency and visibility into the taxes being paid within each of their operating jurisdictions, such as: n Country-by-Country Tax Reporting directive 2 [EU] n Base Erosion and Profit Shifting (BEPS) 3 [EU] n Dodd-Frank Act 4 [US] n The Extractive Industries Transparency Initiative (EITI) Standard 5 [Global] n Publish What You Pay (PWYP) 6 [Global] Given the growing public concern, increasing legislative scrutiny is likely to continue as a cost of doing business in this environment. The Challenge Clearly the challenge for Finance, and more specifically Tax departments, is how to react quickly enough to support these required changes? Key Questions to answer: n Do I have a consistent starting point for all my tax data needs? n Do I have visibility and access to all of my relevant tax data? n Do I have the skilled Tax resources and the requisite tools to enable me to perform ad hoc query and analysis when required? n Do I have the necessary automated controls around my tax processes to ensure a comprehensive view of our Tax position? n How much of my team’s time is spent supporting the current reporting needs of our organization and is there sufficient capacity to respond to the proposed regulatory changes? n Am I confident in the accuracy of my current Tax data set? Longview Tax solves the transparency challenge, by automating results and centralizing all of your tax-sensitized data into a single source. “In our view, the debate around ‘fair tax’ has raised the bar in terms of the expectations of the level of tax information provided by multinational companies and we expect the response will be a greater degree of disclosure by many organisations.” 1 Tax Transparency Seizing the Initiative, Ernst & Young LLP 2013 1 © 2014 Longview Solutions Inc. All rights reserved. Tax transparency is driving the agenda of today’s Tax Department. Finance Executives are under pressure to respond to enquiries for greater tax transparency from regulators, shareholders and the public at large. This, coupled with compressed timelines and little patience for inaccuracies, has effectively changed the Tax landscape. The movement towards greater Tax transparency is affecting large multi-nationals and small public companies alike. One of the main challenges is that companies are often completely reliant on a combination of manual processes and a multitude of spreadsheets to meet these new information demands. How can today’s tax department confidently report their numbers and ultimately provide the level of transparency that is now becoming standard? Increased tax transparency includes: - Country by Country tax disclosure - Regulations down to project level, time periods and historical periods - All taxes including income, property, sales/VAT, environmental

Transcript of TAX TRANSPARENCY…ABOUT TIME! · Tax transparency is driving the agenda of today’s Tax...

Page 1: TAX TRANSPARENCY…ABOUT TIME! · Tax transparency is driving the agenda of today’s Tax Department. Finance Executives are under pressure to respond to enquiries for greater tax

Article

TAX TRANSPARENCY…ABOUT TIME!

Public Pressures & New LegislationPublic outcry on corporate tax avoidance has steadily increased, particularly in the

past few years. The media has inundated a number of global multinationals with

accusations of not paying their fair share of taxes in countries in which they operate.

Many governments have enacted or are considering new legislation requiring

heightened reporting standards. This means increasing levels of transparency and

visibility into the taxes being paid within each of their operating jurisdictions,

such as:

n Country-by-Country Tax Reporting directive2 [EU]

n Base Erosion and Profit Shifting (BEPS)3 [EU]

n Dodd-Frank Act4 [US]

n The Extractive Industries Transparency Initiative (EITI) Standard5 [Global]

n Publish What You Pay (PWYP)6 [Global]

Given the growing public concern, increasing legislative scrutiny is likely to continue

as a cost of doing business in this environment.

The ChallengeClearly the challenge for Finance, and more specifically Tax departments, is how to

react quickly enough to support these required changes?

Key Questions to answer:

n Do I have a consistent starting point for all my tax data needs?

n Do I have visibility and access to all of my relevant tax data?

n Do I have the skilled Tax resources and the requisite tools to enable me to perform

ad hoc query and analysis when required?

n Do I have the necessary automated controls around my tax processes to ensure a

comprehensive view of our Tax position?

n How much of my team’s time is spent supporting the current reporting needs of

our organization and is there sufficient capacity to respond to the proposed

regulatory changes?

n Am I confident in the accuracy of my current Tax data set?

Longview Tax solves the transparency challenge, by automating results and centralizing all of your tax-sensitized

data into a single source.

“In our view, the debate around ‘fair tax’ has raised the bar in terms of the expectations of the level of tax

information provided by multinational companies and we expect the response will be a greater degree of disclosure

by many organisations.”1 Tax Transparency Seizing the Initiative,

Ernst & Young LLP 2013

1© 2014 Longview Solutions Inc. All rights reserved.

Tax transparency is driving the agenda of today’s Tax Department. Finance Executives are under pressure to respond to enquiries

for greater tax transparency from regulators, shareholders and the public at large. This, coupled with compressed timelines and

little patience for inaccuracies, has effectively changed the Tax landscape. The movement towards greater Tax transparency

is affecting large multi-nationals and small public companies alike. One of the main challenges is that companies are often

completely reliant on a combination of manual processes and a multitude of spreadsheets to meet these new information

demands. How can today’s tax department confidently report their numbers and ultimately provide the level of transparency that

is now becoming standard?

Increased tax transparency includes:

- Country by Country tax disclosure

- Regulations down to project level, time periods and historical periods

- All taxes including income, property, sales/VAT, environmental

Page 2: TAX TRANSPARENCY…ABOUT TIME! · Tax transparency is driving the agenda of today’s Tax Department. Finance Executives are under pressure to respond to enquiries for greater tax

Tax Transparency....About Time!

The Solution

If you observe companies utilizing best practices, you’ll notice a number of

important similarities when it comes to managing Tax:

- A drive towards centralizing their tax sensitive data to establish a starting

point for all tax department processes.

- Tight integration with finance to capture tax sensitive data, yet separately

managed from the traditional financial close process, to ensure the required

autonomy and flexibility to model, query and analyze their Tax specific data.

- Standardized tax processes with automated interfaces to mitigate the risk

of error during data input (typical when managing data in spreadsheets) to

gather tax data for month, quarter and year end processes.

Tax departments are now able to achieve the level of transparency and

visibility into their tax processes necessary to meet and exceed current

standards and regulations. Empowering tax to drive more value for their

function and the CFO!

Longview Tax produces total tax contributions by country

Longview Tax is built on the robust Longview platform that automates manual

processes, provides a standard approach and data model, audit trail and

workflow, which increases control and provides confidence in the results to all

your stakeholders.

“When technology plays a greater role in the completion of tasks, tax

departments can devote more time and attention to important strategic

pursuits.”2

Good, Better, Best KPMG International Cooperative, 2013

2© 2014 Longview Solutions Inc. All rights reserved.

Tax Transparency Equation: Increased Transparencyn Tax sensitized data repository to calculate

provisions

n Report tax contributions country-by-country

and project-by-project

n Multidimensional drill down from

consolidated to detailed level

n Date stored for historical, actual and

planning/forecast timeframes

n Reporting and analysis tools to query any

cross section of data

n Flexibility to add additional inputs,

calculations and reports to meet future

transparency needs

Plus Increased Controlsn Standard out-of-box reports for US GAAP

and IFRS

n Automation and standardization ensure

global consistency

n Audit and workflow tools

n Flexibility to update process controls to

adapt to future transparency requirements

Equals Tax Transparency for CFO and Other Stakeholdersn Provides efficient and detailed level of

reporting

n Ensures quality and controls around results

n Future-proofing your ability to adhere to

new tax reporting and disclosure legislation

+=

Increased Transparency

Increased Controls

Confidence in Tax Numbers for All Stakeholders

Page 3: TAX TRANSPARENCY…ABOUT TIME! · Tax transparency is driving the agenda of today’s Tax Department. Finance Executives are under pressure to respond to enquiries for greater tax

Tax Transparency....About Time!

About Longview Tax

Longview Tax is a tax data platform to collect, report and own all the tax department data. Based on Longview’s proven expertise

working with a variety of companies and industries, including some of the world’s most complex multinational companies,

Longview Tax seamlessly integrates with any source system or tax point solution providing a data platform from which all of your

global tax data needs and reporting processes can be performed, including: direct or indirect tax data collection, provisioning &

reporting, tax planning and tax task management.

For more information please visit www.longview.com/tax

3© 2014 Longview Solutions Inc. All rights reserved.

Sources

1 - Tax Transparency Seizing the Initiative, Ernst & Young LLP, 2013

2 - Country by Country Reporting Adoption of Directive 2013/34/EU on the annual financial statements, consolidated financial statements and

related reports of certain types of undertakings Chapter 9 http://ec.europa.eu/internal_market/accounting/country-reporting/index_en.html

3 - OECD (2013), Action Plan on Base Erosion and Profit Shifting, OECD Publishing. http://dx.doi.org/10.1787/9789264202719-en

4 - Dodd-Frank Wall Street Reform and Consumer Act, Section 13(q) to the Securities Exchange Act as adopted by the SEC in August 2012.

5 - The EITI Standard, July 2013 http://eiti.org/document/standard

6 - Publish What You Pay http://www.publishwhatyoupay.org/about/publish-what-you-pay

7 - Good, Better, Best KPMG International Cooperative, 2013

Corporate Headquarters65 Allstate Parkway, Suite 200Markham, ON n L3R 9X1 n Canada

Tel 905.940.1510Fax 905.940.8310Email [email protected]

US Headquarters1265 Drummers LaneGlenhardie Three, Suite 106Wayne n PA n 19087 n USA

Tel 1.888.454.2549Fax 484.367.1153Email [email protected]

International HeadquartersNexus House, Station Road Egham, Surrey n TW20 9LB n UK

Tel 44 203 514 2020Fax 44 203 514 1911Email [email protected]