Tax directors in Brazil must have training in technology and push for collaborative work with IT teams to prepare for a high level of documentation, said Marcelo Natale, tax partner at big four firm Deloitte in São Paulo, at the IFA Congress in Berlin yesterday.
“Tax professionals have to learn and work together with IT people. They can’t just rely on the corporate IT teams. They also have to do more training around technology,” said Natale.
“It’s impossible to execute your tax work without knowing the source of that data,” he added.
Natale says tax directors must also consider the data of their suppliers and clients.
“Tax departments must work together to ensure the information is reliable. You can’t just rely on luck. You need to understand the full process behind the data. IT issues become tax issues as well,” he explained.
The increased use of tax compliance processes has significantly impacted tax professionals in Brazil, particularly when it comes to mindsets and training.
This is due to the surge in audits from Brazilian tax authorities, who often demand the source of the data and what is behind each particular transaction.
Tax departments must be prepared for a high level of documentation, according to Natale, which means collaboration between tax departments and IT teams has become very important.
“Inconsistency is a permanent issue”
Brazil introduced electronic invoicing in 2005, and since then has continued toward further technological growth.
The initial programme has presented many challenges, particularly as each state has different legislation around tax policies, including VAT. The country counts five different types of VATs, according to Natale.
“Tax returns in Brazil may have 5,000 pages – imagine this much information included in the return. Tax authorities will continue to ask for more and more information from taxpayers,” he said.
“Inconsistency is a permanent issue for taxpayers. In 2001, we surpassed one billion electronic invoices issued in a single day. In Brazil, we say tax authorities know more about taxpayers,” he continued.
While technology can enable corporations to mitigate the growing risk of audits and meet data requirements set by authorities, technology training and collaboration is essential in order for tax directors to properly utilize these tools.
