Knowledge sharing

Sunday, February 19, 2017

SAP add-on for immediate Supply of Information (SII) in Spain

SII (“Suministro Inmediato de InformaciĆ³n”) in Spain is about changing the current VAT management system which has been in place for 30 years, introducing a new bookkeeping system for VAT on the AEAT online system, by providing all billing records virtually immediately. 
The new Immediate Supply of Information accelerates the gap between recording or booking invoices and the actual realisation of the underlying economic transaction.
It is introduced because the current technological situation allows its implementation at this time, to improve both taxpayer assistance as taxation controls (e-tax audits).

SAP add-on solution

In Spain a new VAT reporting system will enter into force on the 1st of July 2017. The new Spanish requirements will have a huge impact on many (multi)nationals that run SAP as SAP itself does not provide an E2E solution.

Businesses classified as large companies will just have a couple of months left to adopt this new requirement in its processes, controls and systems.

It will be a real challenge. Failure to comply in time could result in penalties and increased risk of a tax audit. The goods news is that we developed already a SAP integrated SII solution.

That is not new for us as we have developed similar SAP add-on solutions before when SAF-T in Poland, Lithuania and Norway was introduced. SII is our next step in supporting clients that face IT business challenges.

We developed a SAP add-on solution by which the e-submission of the required data from AR and AP invoices is fully integrated in SAP without an external interface or use of external software.  With this add-on the submission of the requested invoices can be done automatically and in time.

Our SII for Spain is ready and functionality can be demonstrated via our own SAP environment.

Read more: SAP add-on for immediate Supply of Information (SII) in Spain

Friday, February 3, 2017

A SAP add-on to be able to cope with SAF-T and e-tax audits

Tax authorities around the world want to receive more frequent and faster tax relevant data for e-audit purposes to analyse Corporate Income Tax (CIT) and VAT positions taken to combat VAT fraud and to determine whether actually a fair share is paid (Base Erosion and Profit Shifting: 'OECD's BEPS').

More countries will therefore move to data request to monitor and electronic audits (e-audits) taxpayers. SAP itself does not provide an E2E solution to meet these (new) legal requirements.

More an more countries will implement 'the Standard Audit File for Tax Purposes (SAF-T) developed by the OECD. This format is intended to give tax authorities easy access to the relevant data in an easy readable format. This leads to much more efficient and effective tax inspections.

E-audits will be performed - using data analytics - on data submitted electronically by the taxpayers.

Read more

Saturday, January 21, 2017

Do we see tax technology as an enabler or as a 'magic' way to be and get in control?

A Tax Control Framework should not operate in silo, but has to be aligned to the company's business control framework (BCF) and should cover more from a tax risk management perspective than only compliance and financial risks. There are various BCF models developed and therefore differences exist between companies.
That same principle applies when we 'wish' for example to copy paste a 'Best practice tax technology framework' from one multinational to another multinational. The devil is often in the 'implementation' / 'configuration' detail as most of the time it is not 'Plug & Play'. For example the legacy systems, business models and/or the structure of the tax function could be different.

When we talk about tax control framework do we focus nowadays not too much on compliance and financial risks?

What has been designed from a tax planning is not always properly implemented or has changed after implementation due to new business initiatives that are an unknown to the tax function due to lack of visibility or disconnect. That could result in material tax risks. Take for example strategic tax risks such as the management of non-routine transactions:




Technology might be an enabler to manage such change management process better, but the people element ('the interaction') - especially if many work streams are involved - are the key drivers that together can realise 'being in control' at go-live and beyond.

Anticipating in time on tax developments and take action 'see the 4 questions I raised and the answer I gave above' is an other example that highlights why managing change is important from a tax control framework as it impacts all the risk categories including reputational, strategic and operational risks.

Source: From tax strategy to artificial intelligence to automating the tax adviser | Richard H. Cornelisse | Pulse | LinkedIn

Thursday, January 19, 2017

From Artificial intelligence to Robocop to indirect tax

I truly love innovation. The sooner the better, but I consider all the stories about artificial intelligence and robotics still science fiction when this is discussed in connection to indirect tax. 
A critical condition for success would be that ERP systems supported by tax technology could actually present real-time all the company's (intercompany) business transactions. 

However, real-time access to a company's blue print is often a recurring bottleneck during business model change (see example 'Commissionaire to LRD'). Certain consultancy firms perform such transaction mapping exercises still via interviews. 

Without access to a complete data set, is artificial intelligence not useless?

Automating the adviser

That being said I think much more can be automated and will be automated. I published in February 17, 2012 my article 'Google the (tax) adviser of the future': [Time stamp 2012!] 

I am following the developments of Apple’s Siri of and of Google in general with great interest. Siri is the speech recognition engine that Apple uses as a virtual personal assistant for their devices. 

The software truly understands your questions, searches the web and provides you with answers immediately. 

Google’s executive chairman, Eric Schmidt, has conceded that Siri could pose a “competitive threat” to the company’s core search business. 

If that is the case, is it not realistic to assume that Google and/or other companies are going to invest a considerable amount of money in developing similar functionalities? 

Such competition between these powerhouses will boost technology improvement.
  • Will such technology in the end truly understand all your technical questions?
  • Is a virtual personal assistant going to respond immediately?
  • Is this science fiction or our near future?
I am aware that some people will argue that certain knowhow depends on individual skill sets and expertise. 

For the moment, they are right, but they might be proven wrong in the future. 

Can this also be automated? 

What successful examples relate to strategic insight and decision-making? 

Chess is a strategic game and relates on fact-based information (pieces on the chess board: relevant facts) and a number of possibilities (moves: calculation of the impact of various options combined with overall strategic insight).
  • If a chess-playing computer, Deep Blue, can beat world champion Gary Kasparov in a six-game match by two to one with three draws against, shouldn’t the automation of an adviser’s strategic decision-making also be possible?
  • Deep Blue’s successor - Watson - has beaten Jeopardy champions at their own game. What was needed to make that happen: “natural language processing, searching immense data sets and creating relationships among disparate sources of information to finally culminate in an answer.”
The good news is that the profession of service providing is a people business. 

We like to be connected to people. 

Maybe the statement about automating the adviser is a bit too provocative, but I still believe a lot more can be automated than we can currently comprehend. Having an open mind is the message I want to get across. 

The only things that probably cannot be automated are our feelings and interactions. 

 That is why it is and will remain a people business. 

Last but not least, I don’t pretend to write the strategy plan for Google. I just admire companies like Google, Apple and Virgin for their innovations and culture. In this blog “Google” represents companies that are technology innovators. The future adviser could therefore be somebody else. 

Do you agree? 

Source: From tax strategy to artificial intelligence to automating the tax adviser | Richard H. Cornelisse | Pulse | LinkedIn