The world of tax is rapidly chaging. From a diverse landscape of data, processes, workflows and tax trained professionals to a data to digital mailbox with tax authority’s cycle.
The BEPS (Base Erosion and Profit Shifting) project, the SAF-T standard, the introduction of a so-called country-by-country reporting (CbCR), the application of pre-clearnace for e-invoices on VAT compliance and the development of a universal tax audit file focusing on customs related data all seems to point into the direction of an acceleration of the digital transformation of the tax world. It looks like most in-house tax departments have up to 100 workflows which could be influenced.
A digital transformaton is only the next step after the tax rules are 100% harmonized and standardized. The BEPS project run by the OECD has put an important step in the direction of standardization of taxes and the way tax relevant data packages are reportable to tax authorities. The OECD manual provides professionals the guidance on how to deal with the data creation, collection, injection and disclosure of the XML version of CbCR, which is then ultimately sent to the digital mailbox of the tax authorities. The sooner tax authorities set standards like the CbCR, the sooner taxpayers are expected to comply with such ‘data architecture and management’ aspects of running a full tax compliance cycle.
If tax wants to be a co-pilot to business, it needs to start treating ‘tax relevant data management and architecture’ as strategically critical to the positioning of tax within the MNE. The strategic profile of tax as a communicator to different internal as well as external stakeholders will turn the lead tax team into the major ‘relationship management and communication team’. Being fully in control on tax matters in todays’ world will include: full (=100%) compliance, only limited tax risks accepted by management and society and a sustainable communication with all major stakeholders.
In this challenging environment, it is crucial to have a clear and firm tax strategy, so what is yours? Contact us for a personalised complimentary session for more information.