As global corporate tax reform progresses, discussions continue to intensify about implications for multinational enterprises (MNEs) headquartered in the US. In June 2016, the US Treasury Department and the Internal Revenue Service released final regulations concerning Country-by-Country Reporting (CbCR).
As global tax reform driven by OECD Base Erosion and Profit Shifting (BEPS) Actions progresses, regional overhauls are also speeding ahead. India is now one step closer to rolling out the largest reform of its indirect tax system in a quarter century.
Due to its sweeping nature, the OECD’s BEPS initiative is set to transform the global tax environment, raising a host of risk-laden questions: How onerous will compliance be? Will this unprecedented level of transparency increase an organization’s reputation risk? How will customs processes change? Will BEPS requirements alter the valuation of proposed mergers and acquisitions?
In my last post, I discussed how successful leaders can drive organizational change. But that’s only part of the equation; employees also need to be part of the calculation and actively involved if organizational change efforts are to succeed.
People have always longed for the ability to predict the future. Today, many hope that big data and predictive analytics will help them do so. Although big data and predictive analytics can deliver major benefits, it is important to understand what they can realistically help organizations achieve.
When it comes to comparing different types of requests for proposal (RFPs), software RFPs would be apples and services RFPs would be oranges. Therefore, tax managers preparing an RFP for a service should keep in mind the differences between the two types, and that the creation of services RFPs requires a specialized approach.
The outcome of the recent US Presidential election surprised many, and it is just one more in a string of recent drivers of global economic, legislative, and regulatory uncertainty. Brexit, EU State Aid investigations, and the OECD Base Erosion and Profit Shifting (BEPS) Actions figure most prominently among these disruptions; each will significantly influence foreign direct investment, trade, banking, corporate taxation, and the exchange of tax information between jurisdictions.
A partnership is often referred to as a two-way street, alluding to the give-and-take dynamic of the parties involved. This dynamic of mutual understanding and collaboration, along with established objectives, result in the most effective partnerships. These attributes are demonstrated once again in the latest product and solution released from the two-decades-long partnership between Vertex and enterprise technology provider SAP.
Congratulations to ALDI, Best Buy, Coca-Cola, Johnson & Johnson, Koppers, and United Services Automobile Association (USAA)! These six companies were honored with Corporate Tax Innovation Awards at this year’s annual Vertex Exchange conference last week.
Insights from two leading data security and privacy experts happen to describe the purpose of a new tax policy/technology forum comprised of leaders from multinational enterprises (MNEs), worldwide governments, non-governmental organizations (NGOs), and global software and services companies, including Vertex.
The demand for technology professionals throughout Latin America will outpace supply by 2019 -- that insight comes from a study commissioned by Cisco for IDC, and it has some troubling implications for the tax functions of companies doing business in the region.
Each year, Working Mother magazine collects extensive data about the workforce policies of US companies regarding their benefits, childcare, flexibility, parental leave, and company culture. After stringent analysis, their list is culled to 100 exemplary companies, selected for their outstanding leadership in creating progressive programs to support all employees’ work and home lives. It’s gratifying to me and everyone in our organization that Vertex was selected as one of the 2016 Working Mother 100 Best Companies.
While most of us are trying to get our heads around what the Internet of Things (IoT) is, many of our devices have started using IoT (also known as “ubiquitous computing”) information. This exchange of information often takes place without our knowledge, and it’s already influencing how we experience the world.
When it comes to the adoption of enterprise cloud technology, many companies are “barely out of the first inning.” That is what Oracle Vice President of Technology Robert Shimp told VentureBeat and that the same prognosis was repeated, in optimistic terms, at the Oracle OpenWorld conference in San Francisco.
The need for tax leaders and their tax functions to closely collaborate with CFOs, other C-suite executives and the Board will intensify due to compliance requirements related to the OECD’s Base Erosion Profit Shifting (BEPS) action plan.
Is U.S. corporate tax reform on the horizon? Although the issue demonstrated a vexing ability to appear and – just as quickly -- disappear from the legislative radar screen in recent years, there are several signs that genuine tax reform could soon have more traction, and longer staying power.
Based on years of interactions with corporate tax leaders, I’ve grown familiar with a common set of challenges that afflict tax departments of all sizes, across all industries and geographic regions. These trials include being under-staffed, under-funded, and engaged late when emerging business models are considered.
Tax leaders who’ve grown weary from beating down a procession of major tax management challenges – only to see an onslaught of new tax challenges pop up each time – might find that their jobs feel like an endless version of the arcade game Whac-A-Mole.
We are pleased to have entered into an alliance with KPMG LLP, the US audit, tax, and advisory firm.
Most tax professionals I meet are interested in information that can help them elevate the strategic value of their tax functions and advance their careers.
While BEPS requirements and the drama surrounding the British exit from the European Union (EU) dominate the global business pages, a potentially more dramatic issue is unfolding in Europe: state aid investigations into prior tax agreements throughout the EU.
Hadoop is the “most-deployed and most-discussed big data technology,” according to enterprise software expert and Demandbase SVP technology Aman Naimat. The open-source software platform is commonly described as an “ecosystem” that stores and processes vast amounts of data via many different components.
If the current view by the OECD and country revenue authorities is that BEPS guidelines, in particular Country-by-Country Reporting (“CbCR”), are just a minimum standard, what does this mean for corporate taxpayers trying to comply? Does this mean the door is wide open for continued change year over year? Are corporate taxpayers being lulled into a false sense of security if they just follow the current guidelines without thinking about future changes? Is there a high probability that countries are just using the guidelines today as the “easy button” to adopt and get moving on BEPS compliance as requested by the OECD and that once up and running, they will move the goalposts as soon as they can?
BEPS is boosting tax management to a Board-level concern. That’s one of the major takeaways of a global BEPS survey conducted by Deloitte. The survey findings are based on responses from over 600 tax and finance managers and executives from multinational companies (MNCs).
Thus far Britain’s vote to leave the EU has sparked concern, bouts of panic, and plenty of misinformation. I will outline five key Brexit points and perspectives to steady you as the vote’s aftereffects reverberate.
The Organisation for Economic Cooperation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) project represents a fundamental change to the global tax system. BEPS is already elevating the strategic profile of tax departments within multinational corporations.
As leading tax and business minds around the globe flesh out what the post-BEPS world will look like, it’s becoming apparent that the tax function’s performance – and its strategic credentials – will hinge on its ability to address the massive data management challenge that BEPS and related disruptions create.
“The retailers that will move ahead of the pack in the coming year are those that can deliver a consistent, clear, clean, simplified, and seamless message across all channels.”
That assertion appeared in Deloitte LLP’s “Retail Industry Outlook” last year, and it remains highly relevant today.
CEO Insight’s annual “Best in Class” awards, which recognize best practices and innovation, honor Vertex as the Top Tax Technology Provider in the publication’s May issue. That’s high praise coming from a UK-based publisher that’s been described as a blend of The Wall Street Journal and The Economist.
New research contains doses of good news and bad news for chief financial officers (CFOs) and chief tax officers (CTOs) striving to avoid financial statement errors.
Retail companies of all sizes confront serious challenges for “more” of just about everything these days.
Specifically, retailers face challenges related to selling through more channels; conducting business in more countries; adjusting to more merger & acquisition (M&A) activity; adhering to more rules and regulations; and tracking down more tax data that resides in more and more information systems.
John Kotter, Harvard Business School Professor and Chairman of Kotter International, stated, “Perhaps the greatest challenge business leaders face today is how to stay competitive amid constant turbulence and disruption.” Kotter’s thinking on change management resonates with Vertex’s emphasis on leadership and driving performance. I also suspect his approach to leading organizational change may be broadly applicable to a variety of change-intensive settings, including tax functions.
Back in December 2015, the U.S. Treasury Department and the IRS jointly release their proposed U.S. country-by-country (CbC) reporting regulations related to the far-reaching Action Plan 13 on Base Erosion and Profit Shifting (BEPS) effort by the Organisation for Economic Cooperation and Development (OECD).
The overarching theme of SAP’s “Finance2016” conference in Las Vegas last month was brief, quick and to-the-point: corporate finance functions are going digital.
The reactions by multinational enterprises (MNEs) to countries’ adoption of the country-by-country (CbC) reporting template filing together with concerns that it will not be kept confidential are starting to surface and some of these reactions may surprise you… “Can I adopt early and I’ll take my penalty please.” It will be interesting to keep your eye on continued reactions by MNEs in a post BEPS/CbC reporting world.
In the 2013 sci-fi movie “Pacific Rim,” humans and governments come together to battle legions of sea monsters. I can safely report that the 2016 Pacific Rim Tax Institute conference featured less dramatic, more realistic scenes and dialogue.
In my previous posts, I outlined the two initial steps to preparing for CbC reporting requirements. The third a proactive approach to global risk management. Multinational corporations (MNC) should anticipate and prepare for the possibility that their CbC report will become publicly available.
Vertex has been named a 2016 Top Workplace by Philly.com, marking the second consecutive year that Vertex received this honor in the large-employer category. The honor, which recognizes companies that operate in the Philadelphia region, is particularly unique because it is determined by employees.
The second step is to: Assess IT and Tax Resource Needs - It is critically important that corporations immediately assess if their existing financial accounting systems will allow their companies to comply with these new reporting requirements.
Let’s start with the first step:
As I indicated in my last post and my colleagues Ana Paula Maciel and Ernesto Levy note in a recent webcast, Latin America is one of the largest and fastest-growing regions for U.S. exports. Of course, many countries in the region are also renowned for the intricacy of their tax environments. Companies looking to enter or expand their activities throughout Latin America need to master the complex challenges of transactional tax data management in the region.
The CbC report will be filed with the tax administrator in the tax jurisdiction of the MNE's ultimate parent. Thereafter, that tax jurisdiction is responsible for submitting the template to other tax jurisdictions in which the MNE operates. The primary method for automatically exchanging the template between tax administrators will be government-to-government mechanisms, such as bilateral tax treaties and tax information exchange agreements. There is a lurking vulnerability of information mismanagement between governments.
U.S. Sales tax changes are once again on the rise. This trend marks one of the key takeaways from Vertex’s annual Sales Tax Rate Study, which shows 612 sales and use tax rate changes in the U.S. for 2015.
Multinational corporations (MNCs) are (rightly or wrongly) seen by many as undermining the credibility of the international tax system by paying what is sometimes perceived as unfair tax rates. Most global executives are aware of cases where publicly traded companies have had to openly respond to governments and the press about their tax affairs; therefore, it would be prudent to plan for an uptick in tax controversy due to the CbC reporting template.
Two expected results of the CbC reporting template are increased transfer pricing-related disputes with taxing authorities and the incidence of double taxation especially if the OECD's other transfer pricing BEPs action plan changes are adopted in final form.
Francis Bacon once said, “Time is the measure of business.” Bacon’s wise observation from nearly 400 years ago is complemented by some modern wisdom from MIT Sloan Research Scientist George Westerman that Gartner’s Paul Stokes recently tweeted (and I retweeted): CIO[s] must allocate their time not to where the budget is but to where the org is meant to be by shaping it to where it can be.
Because of its inherent importance as an initial audit risk assessment tool, one must assume that the template will serve as part of the transfer pricing analyses and reconciliations needed once a transfer pricing audit is invoked by the various taxing authorities.
The G20 leaders at their summit in Antalya, Turkey, on November 15-16 of last year endorsed 13 final reports developed under the G20/OECD base erosion and profit shifting (BEPS) project and urged the timely implementation of the project in all countries, including developing nations.
In the 1950s, President Eisenhower delivered a speech in which he grouped his biggest problems into two categories, the urgent and the important. The challenge, he added, was two-fold: urgent problems were rarely important while important problems were not urgent. In 2016, tax functions confront a similar problem as they struggle to differentiate between urgent tasks and the important ways in which they should support and further business goals and performance.
The OECD has recommended that countries require MNEs to file the initial country-by-country template for fiscal years beginning on or after January 1, 2016 and within one year after the close of its fiscal year. For example, a calendar-year company would be required to file its initial template for 2016 by December 31, 2017. While many countries are adopting these effective dates, there are some that are not.
Purpose is important. “Business experts make the case that purpose is a key to exceptional performance, while psychologists describe it as the pathway to greater well-being,” note Nick Craig and Scott Snook, co-authors of a Harvard Business Review article that examines the value of purpose-driven professionals and businesses.