The coming year will see some of the biggest regulatory changes in the corporate global tax landscape that we’ve seen for some time. Are you ready to meet the reporting and audit requirements coming your way?
The OECD has delivered two significant initiatives:
These, along with local changes, have transformed international tax and tax authority behavior.
As I recently wrote, multinational organizations—and especially their tax departments—are firmly in the cross-hairs of the national tax bodies of the countries in which they operate. The financial pressures on governments worldwide have driven them to look at ways to increase revenue. One approach is to collect more taxes from multinational companies that earn significant revenues in-country but pay small amounts of local corporate tax.
This has led to national tax regulation changes in many countries, which means organizations will need to plan and manage their tax affairs very differently than in the past.
A significant change is the requirement for companies to report transfer pricing based on a “master file,” with separate “local files” under Country-by-Country Reporting (CbCR) regulations. In almost all cases, this will require a technological solution.
Unfortunately, tax departments have often been the “red-headed stepchild” of finance teams. Compared with their accounting and FP&A colleagues, tax departments have traditionally under-invested in IT systems. By and large, they rely on spreadsheets and manual processes—processes that will no longer meet the requirements of the new regulations.
Corporate tax teams must now find the right solution to help meet regulatory requirements accurately and transparently—while also increasing governance and reducing risk.
On Thursday, March 2, I will host a webcast with my colleagues at PwC to review the challenges of the new tax framework and discuss what to look for in a technology solution. Tax teams should consider cloud software that includes: