Corporate taxes
challenges & opportunities.
In the area of corporate taxes, there has been a clear trend for years. More compliance obligations and greater tax transparency are increasing the demands on the tax function while staffing levels and budgets remain the same or are declining ("do more with less"- more tasks for fewer and fewer employees). Standardization and automation, where possible, are opportunities to deal with the challenges.
Additional Reporting Obligation
Increasing reporting and documentation requirements characterize the work of the tax function. In the past, in addition to tax structuring and tax declaration, the tax department also dealt with the comprehensive accounting of deferred taxes in the IFRS consolidated financial statements and, in accordance with BilMOG, in the HGB financial statements. At the latest with the BEPS (Base erosion and profit shifting) project of the OECD and its implementation in binding EU directives and national tax laws, the challenge is to understand the individual reporting obligations in material legal terms and to implement them in operational practice in terms of processes and data technology.
Increasing requirements for Tax Transparency
The increased public awareness of corporate taxes ensures that taxes have to be reported as the size of the company increases. Taxes need to be explained. Not everything that is legal is legitimate. From 2024, it is planned that certain income tax information will have to be disclosed. Alongside this, comprehensive sustainability reporting, which is only just beginning with the GRI 207 standard, will take place from 2024 onwards, which will have to be made publicly available about taxes in the future.
Cost pressure
Group-wide efficiency and cost reduction programs do not stop at the tax function. The previous staffing levels and the material costs for IT infrastructure and external consultants are being questioned and are putting the department under pressure to justify its actions. Where this has not yet been done, it is necessary to catch up with the standardization of processes that is well known in accounting. In particular, to create a basis for further automation.
Recruitment
The baby boomer generation will retire in the next few years. The number of those interested in taxes is steadily declining. Technology is expected to compensate for this to some extent, especially in routine activities. Nevertheless, attracting the right personnel is a key pressure point for the tax department.
Data quality and Data granularity
The tax function only produces its own data to a very limited extent. The tax function depends on the supply of data from accounting, controlling or legal departments. This presupposes that the data is of the necessary quality to be processed for tax purposes. In addition, there is the required level of detail. Data at the transaction level and per legal entity is required. In practice, there is often a lack of both and of suitable processes to ensure that the data is delivered to the tax function in a quality-assured and timely manner. The increasing relevance of data for the tax department should lead to a more professional approach.
Requirements of the tax authorities
Data access and e-balance sheets were once the beginning. Today, it is clear that the tax authorities are hungry for data across all tax types. It is still a one-way electronic street, as there is a lack of feedback from the tax authorities. However, it is clear that the tax function must handle data professionally. It must be ensured which data is transmitted to the tax authorities and when.
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our advice.
DO WHAT YOU LOVE.
Our consulting services focus on identifying, defining and implementing the relevant tax requirements for your SAP systems.
We attach particular importance to the optimization of the process steps:
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Data request
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Customization
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Processes
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Reporting
Whether you are implementing a SAP S/4HANA transformation or updating (refreshing) your existing SAP/ERP systems, our team is at your disposal.
Our comprehensive services include the conception of business blueprints, global and local templates as well as the evaluation of the technical implementation and services.
We support you during the implementation phase and accompany the test management including training.
Trust in our expertise to integrate tax processes into your SAP landscape and thus increase your business efficiency. Contact us and discover how we can support you in the successful implementation of your goals.
fields of play.
Global Minimum Tax - BEPS 2.0 Pillar 2 A new tax law with new legal terms and a new tax calculation of its own kind in group tax law is to be applied from 2024. We support you in the following way: - Understand what the regulations are. - Determine to what extent the group is affected. Affectedness concerns the dimensions: - Substantive law - Data requirements and processes in the annual and quarterly financial statements and to comply with the new tax declaration requirements - Coordinate and involve the functional areas outside the group tax department, in particular accounting, IT, legal and investor relations - Set up the multidisciplinary project to implement the requirements of the global minimum tax in the group - Transfer the project into the regular operations of the group.
Tax reporting obligations - Tax Reporting- CbCR - Public country-by-country reporting in the EU - DAC6 Reporting requirements for cross-border tax arrangements - GRI 207 We support you in efficiently and effectively implementing or improving the aforementioned reporting obligations in practice. Based on a fit gap analysis, we work with you to develop a target picture, derive fields of action and support you in implementing the individual measures.
Income taxes in the annual financial statements - Tax Accounting- Determination of current taxes, deferred taxes, tax reconciliation, tax note disclosures - ETR management We support you, among other things, in: - Design of the relevant tax accounting processes - Selection of suitable IT applications (software selection process - greenfield select) - (Interim) management of tax accounting in the quarters and in the annual financial statements.
Tax returns and e-balance sheet - Preparation and submission of tax returns and e-balance sheet We ensure that the required tax returns and e-balance sheet are prepared and sent to the tax authorities after your approval. With an eye for the essentials, our aim is to process the returns efficiently. We proactively suggest process improvements.
Digital tax field audit - e Tax field audit We love data and processes. We won't leave you alone with the tax field audit. We assist with, among other things: - Preparation of applications for accounting relocation and their defense - Setup, testing of data access (Z1/Z2) and in data preparation for purposes of data medium transfer (Z3) - Preparation and quality assurance of tax procedural documentation - Advice on the implementation requirements of foreign tax authorities, for example in the implementation of the SAF-T standard in the respective country. In the area of international tax law, we access the global network of our partner Andersen. - Data-based evaluations and audit routines
