As digital innovation sweeps through business processes, including those within the tax function, it’s increasingly important for tax leaders to understand how the transformation looks from the board’s point of view. More and more frequently, chief tax officers and vice presidents of tax are fielding questions from the board on the impact of digitalization on tax strategy and that trend is only going to accelerate.
Countries’ tax policies are of course intertwined with their trade strategies at many points, as the current debate over U.S. tax reform illustrates. Consider, for instance, Speaker Paul Ryan’s recent claim that the U.S. tax code is “one of the worst” in the world and that it undermines the nation’s global competitiveness.
Artificial Intelligence (AI) is creating a tremendous buzz in the tech industry and far beyond, yet it seems to inspire fear rather than excitement for many.
The implementation of a value added tax (VAT) in the Gulf Cooperation Council (GCC) continues to move forward, despite ongoing turmoil among its member countries.
Ready or not, real-time taxation is here, or, at least, something very close to real-time.
The global value added tax (VAT) cycle is so demanding and the rules change so frequently, it’s all too easy to get stuck in heads-down mode, with all attention focused on day-to-day processes. But it’s good from time-to-time to take a step back and look at the broad outlines of VAT management. That’s especially true when big changes are unfolding, such as tax authorities’ moves toward near-real-time reporting, such as VAT SAF-T type requirements and Spain’s SII initiative.
The Gulf Cooperation Council’s (GCC) Unified VAT Agreement is not looking so unified these days and a Brexit-esque development in the Middle East may be to blame. The GCC’s turmoil is yet another reminder that tax functions within global companies need to remain alert and agile when it comes to addressing value added tax (VAT) challenges.
Congratulations to AmeriGas, Duracell, Espresso Services, L.L. Bean, Microsoft and Northern Tool + Equipment for their highly innovative use of tax technology! Vertex is recognizing these six companies as 2017 Tax Innovators for the ways their tax functions leverage solutions from Vertex to solve complex business challenges.
Analysts remain resolutely bullish on the cloud for the retail sector, and not just for commerce apps; core business applications such as ERP are prime candidates for cloud delivery. Forrester published a new report, “It’s Cloud Go Time for Retailers: Cloud Apps and Platforms Offer More Rewards Than Risks for Retail,” and the subtitle really says it all.
The adjective “transformational” is in vogue these days. The description applies to the pervasive overhauls of business models, best practices and technologies that have become table stakes given our accelerated business environment. In many ways, “transformational” characterizes the astounding speed and depth of change occurring in every corner of an organization, including – or especially – within the tax function.
As India approached the July 1 implementation of its Goods and Services Tax (GST) framework, heated commentary about the challenges of GST compliance began appearing. One article, “Adding to the Chaos,” which appears in Business Today, a leading India-based business magazine, warned that GST’s multiple rate structure for the same good or service could “create new problems even as it solves some old ones.”
The White House recently announced an accelerated legislative timetable for tax reform, aiming at completion toward the end of the year. While questions continue to swirl around the contents of the plan, it will likely include a reduction in the corporate tax rate, perhaps to the 20 percent rate Congress and the President were reportedly seeking earlier this year. This plan was released on September 27 and is now known as the “Unified Framework for Fixing our Broken Tax Code.”
A Big data analytics continue to transform the retail industry by giving companies a way to tap into deeper knowledge of their customers to provide increased value throughout these ecommerce interactions. This necessitates more robust tax-focused data management as well, given the growing complexities of tax rules and the demand for more tax transparency.
Artificial Intelligence (AI) has had a checkered development history over the decades. Periods of heavy funding have alternated with stretches of diminished interest from academia, businesses and governments – until recently. Now that AI interest is white-hot and seems likely to sustain, it’s time to look at its impacts to a wide range of business functions, including tax.
Autumn has arrived, and we still don’t know much about the specifics of U.S. tax reform. So what can we say about it? Not much, at least not definitively, but there are five general statements we can make about tax reform and how it might affect companies.
The counter attack against the artificial intelligence (AI) backlash has begun. This is good news for tax executives evaluating how AI and machine learning (a common form of AI) might help improve their function’s performance.
As value added tax (VAT) gains popularity among global jurisdictions, countries with long-established VAT systems confront a growing challenge: the so-called “VAT gap.” The phrase refers to the shortfall between expected revenue from the tax and the amount actually collected. Tax executives within multinational corporations (MNCs) ought to monitor how jurisdictions address this gap.
Recently, Nevada became the first state in the U.S. to preempt local tax jurisdictions from taxing commercial transactions that use blockchain technology. The bill, signed into law by Governor Brian Sandoval on June 5, also prevents local authorities from requiring a certificate, license or permit for use of the technology.
Any time an ex-CFO of the biggest company (by revenue) in the United States has something to say, you can bet it’s worth listening to. I was interested to read Charles Holley’s description of how he cultivated a healthy relationship with Walmart’s board.
U.S. Tax executives are experiencing growing anxiety regarding international tax planning challenges as new issues start to materialize due to potential U.S. tax reform.
The retail sector has enthusiastically adopted big data technologies – which may prove invaluable as the industry looks for new ways to manage the rising pressure of tax compliance requirements.
As the on-again, off-again saga of tax reform keeps tax executives on edge, debate continues to rage (or, at times, sputter) on over the shape any overhaul should take. Lower corporate tax rates are a favorite proposal of the President and among the most likely potential change to make it into any actual legislation.
As digital transformation accelerates, companies of all sizes have a growing need to demonstrate business agility. Successful organizations scale up and down to quickly seize market opportunities and dodge strategic risk.
Are you ready for real-time taxation? In the past year, the phrase has been mentioned with growing frequency among governmental tax administrators, executives of technology companies, and an interesting collection of thought leaders in the global tax realm.
This year’s award for the country with The Most Complex Tax and Accounting Environment goes to…Before we get there, it’s important to note that tax complexity, while crucial, only represents one dimension of a country’s global financial competitiveness. Compliance demands imposed by accounting rules and regulations are an important measure, too, although these challenges often receive less attention.
Blockchain applications are emerging faster than you might expect. The potential business impact is enormous, including significant tax implications. The distributed ledger technology is “redefining what it means to transact, so dramatic changes across an enterprise should be expected,” according to a new Deloitte report.
In January, the Cooperation Council for the Arab States of the Gulf – also known as the Gulf Cooperation Council (GCC) – announced a formal agreement regarding a new value-added tax (VAT) to be adopted by GCC member countries which are Bahrain, the Kingdom of Saudi Arabia (KSA), Kuwait, Oman, Qatar and the United Arab Emirates.
Cloud technology adoption is soaring, which is elevating the tax function’s need to consider cloud investments.
It’s hurricane season for tax professionals. During our recent European conference we discussed the powerful winds of change impacting tax functions. The event provided a unique opportunity to share perspectives with industry colleagues, alliance partners, and other thought leaders on a range of transformational tax trends.
The India GST Council released a draft tax rate schedule for more than 1,200 products and services that still may be subject to change until approved by the government. In early June, the GST Council will reconvene to hash out tax rates for more items. The rates that the GST recently shared “do not indicate a major deviation from the present tax rates, while also ensuring that GST should not pinch the consumer’s pocket,” according to The Economic Times.
Audit exposure. Financial restatements. Class action lawsuits. The consequences companies face for failing to successfully navigate the daunting complexity associated with communication services taxation can be severe. Managing these intricacies has grown more challenging as the world continues the rapid transformation to become more mobile.
In February, the European Union (EU) considered legislation that would have levied a new tax on robots. Although the proposal did not compute with most EU lawmakers, its materialization shows that robotics – along with machine learning, artificial intelligence (AI) and related forms of 21st Century automation – are pushing traditional tax concepts into new territory.
Numbers feature prominently in the narratives describing India’s massive tax reform. The country’s adoption of a completely new, highly streamlined and much anticipated Goods and Services Tax (GST) features some compelling data points.
Business and tax leaders appear more optimistic about the possibility of US tax reform than they have in decades. While this feeling is fueling a surge in companies’ stock prices and optimism is in the air at any tax conference these days, could there be any risk that tax reform will not occur?
Qualifiers are crucial when addressing withholding taxes on domestic business-to-business transactions in Latin America. These qualifiers – which include phrases like “usually,” “at the moment,” and “in other cases” – point to the inherent complexity of withholding tax applicability, rates, calculations and exemptions in Argentina, Brazil and Mexico.
Legislative bills related to India’s historic sales tax overhaul received approval from the country’s Lower House of Parliament in late March. On April 6, 2017, the Upper House of the Indian Parliament also accorded its approval to the draft bills, without recommending any changes or amendments.
Decades ago, the phrase “permanent record” alarmed high school students who worried that their bad behavior might have undesirable consequences in the distant future. Today, the ubiquity of social media and mobile devices gives new meaning to the phrase. Today’s bad behaviors that are posted online are certain to become part of our highly public permanent records.
On March 16, India’s influential Goods and Services Tax (GST) Council approved the draft State GST (SGST) and Union Territory GST (UTGST) bills, completing its approval of all five bills related to the proposed new indirect tax system. While additional approvals of the legislative package are needed, this massive overhaul of the country’s taxation system remains on track to take effect July 1.
Corporate tax functions should welcome hackers with open arms. I’m serious. Vertex recently completed a one-day hackathon in which colleagues from a diverse collection of business and functional areas gathered to brainstorm and develop potential solutions for a user interface (UI) challenge, designed by a team of Vertex employees.
There’s a good reason why the improvisational comedy TV show Whose Line is it Anyway? has run for over a dozen years on three networks and in two countries: people love to watch talented performers wing it.
President Ronald Reagan famously used the phrase “trust but verify” to describe the United States’ stance regarding the Soviet Union’s compliance with nuclear arms reduction treaties. Across the globe, governments traditionally embraced a similar philosophy regarding corporate compliance with tax regulations.
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.