The increasingly large number of new tax compliance obligations worldwide have changed the way we look at compliance. New regulations are not only continually be implemented at an international level (e.g. CbCR, Mandatory Disclosure rules, VAT Quick Fixes, DAC6, OECD Pillars One and Two) but also at a national level (e.g. SAF-T, e-invoicing, SII, Making Tax Digital). These additional requirements are on top of annual and periodic tax returns.
Besides the increase in compliance obligations, tax authorities often demand that entities provide information (nearly) real‑time, which creates additional challenges in terms of data quality, data collection and data transfer. Our clients want an end-to-end compliance approach that safeguards accuracy, ensures timely delivery and is automated.
What are the key challenges facing organizations?
With regard to global tax compliance, we are currently seeing a sharp increase in requests in five key areas. Our clients’ challenges / goals are to:
- Gain global insight into compliance obligations.
- Identify opportunities to combine different reporting areas in one proposition (e.g. indirect tax, direct tax, financial statements, transfer pricing).
- Receive support in setting up an end-to-end compliance model (from data to reporting), including the use of available systems and technology. The challenge here is how to cope with structured / unstructured data, data quality, data collection and the transfer of data.
- Gather input on setting up the global tax function, including transformation support.
- Receive advice on whether to insource or outsource compliance formalities.
- Find a compliance partner that is aware about further opportunities outside regular compliance formalities.
How can we help?
More often than not the above challenges are interrelated, for example the decision on whether to insource or outsource tax compliance depends on the way the global tax and finance functions are set up and on the quality of the data. They require support from a KPMG team dedicated to global (direct & indirect) tax compliance that has a central vision and knows how to combine all areas into an approach tailored to your needs; a compliance partner that can combine compliance areas into a single end-to-end approach, while thinking about the setup and future of your global tax function (in house solutions or outsourcing).
- To help clients with their global tax compliance formalities we have one central project management team, regional hubs if needed, and back office support from our Delivery Centers in Budapest and India. Our Budapest Delivery Center primarily focuses on indirect tax compliance (VAT returns, annual returns, EC Sales Lists, Intrastat returns, local reports, SAF-T etc.)
- We combine different reporting areas to ensure we make efficient use of the data collected and safeguard the transfer of knowledge between different compliance areas.
- We provide an end-to-end compliance solution, designed together with you and aligned to your needs, systems/ERP requirements and available authorizations. In addition to the actual compliance preparation, this includes an approach to data collection, data conversion, automation (OCR, RPA, central model of data collection) of internal processes as well as data analytics.
- We discuss with you the pros and cons of insourcing or outsourcing compliance formalities.
- We assist with the setting up and transformation of your global tax function and provide input on business transformation (see also “tax strategy”).
- By acting as an end-to-end solution architect, we have a clear view on the full tax landscape which enable us to assist on compliance in an efficient way and to address (and solve) potential tax issues timely. We do not only make sure our clients are compliant, but also look for further opportunities in other fields of taxation.
If you would like to know more about tax compliance please feel free to contact our specialists!