Tax technologies have expanded and developed across all practices in international taxation. With corporate income tax software available for data collection, tax planning, tax provision, audit support and tax task management, it’s no wonder that developing an integrated solution is being discussed by tax vendors in detail.
“Corporations would desperately like countries to adopt a common system rather than a disparate mix of approaches adopted by different countries,” said George Bull, senior tax partner at RSM, on the inconsistency in operating systems.
Compliance software, especially, is a core part of indirect/direct tax e-filings. However, with governing bodies, such as the OECD, developing reporting global standards such as the common reporting standard (CRS) for the automatic exchange of information (AEOI), implementation has varied across member states.
As a direct result, research conducted by Aberdeen Group and commissioned by
“The nature of the problem with AEOI is that it’s changing dynamically,” said Andy Hovancik, CEO at Sovos Compliance. “It’s no longer a matter of simply automating the reporting. Financial institutions must deal with data from multiple systems spread across dozens of regions around the world and, as a result, we’re seeing financial institutions begin to shift from point solutions to
Corporations in the spotlight
As global business reporting requirements become
Sontag affirms that big data-driven tax compliance and risk assessment will be an area of continued growth. “Software analytics are becoming increasingly capable of producing robust assessments of non-compliance risk, meaning that tax authority audits will be more specifically selected, more focused, and more likely to return results,” said Sontag.
For the CRS, the new account procedures to record the tax residence of a business was put in place from January
FATCA is said to have acted as the catalyst for similar automatic exchange requirements being adopted across the globe. For non-US financial institutions, FATCA requires a report on a business’s financial accounts held by US taxpayers or foreign entities that US taxpayers hold a substantial ownership interest.
The new global standard of sharing financial information between tax authorities and corporations has forced businesses to have information gathering procedures in place, since the start of the year. However, growing concerns over the potential mirroring of FATCA filings in the US has EU businesses looking to digital solutions to comply with the AEOI.
Preparing your business
“Taxpayers need to be prepared for this additional transparency and the information that will become available to the authorities,” said Boris Nemirov,
“All of those things coming together will ultimately lead to tax technologies really changing the paradigm in the tax world in terms of how data is used and
Present tax functions will make dedicated tax data hubs mainstream, which will allow businesses to focus more on tax strategy with the help of technology.
In Part II of International Tax Review’s tax technology videos, Nemirov provides an exclusive insight into Deloitte’s journey with tax specific software and tools and what new technologies businesses can expect in the future.
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