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Meeting Local Finance Requirements
 

Meeting Local Finance Requirements

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Adopting a local country compliance strategy that works for your SSO

Adopting a local country compliance strategy that works for your SSO

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    Meeting Local Finance Requirements Meeting Local Finance Requirements Presentation Transcript

    • Meeting local Financerequirements:Adopting a local-countrycompliance strategy that works foryour SSORalf Schaufler – NycomedBob Maurau – DeloitteBruno Vandekerckhove – Deloitte11th Annual European Shared Services & Outsourcing Week 201112th May 2011 - Amsterdam
    • Agenda Topic Introductions Centralisation Approaching Harmonisation - Efficiently specialised tax & accounting groups - Globally operating tax & accounting groups - Worldclass compliance technologies and processes - Knowledge Systems - Cosourcing Solutions - Looking Ahead Interactive Discussion1 © 2010 Deloitte LLP. Private and confidential
    • Market trends From local to central delivery of compliance services More functions (a.o. compliance) are centralized in SSC or SSC FIN HQ Organizations move back office functions to SSC Shared Service FIN Centerscentralization Local CoE of FIN P oint ugh. STAT gle no A Sin not e ct is Co nta CoE VAT Local STAT Local Local Local CIT STAT CIT Local VAT Local CIT Local VAT time © 2010 Deloitte LLP. Private and confidential
    • Market trendsFrom local to central delivery of compliance services • Shared Service Centers are maturing and organizations are expanding them to include more types of processes: multifunctional Shared Service Centers • Enterprises are pursuing a hybrid service delivery strategy for support processes, mixing shared services (on- and offshore) and outsourcing • Reducing costs and improving controls remain top benefits of Shared Services operations, however many organizations are achieving other benefits, including process efficiency and increased transparency and visibility of data • The importance of access to a high quality workforce will only increase over time as competition for low cost resources increases and companies move to lower cost regions and geographies with decreasing pools of skilled resources • Increased country-adoption of IFRS decreases the need for local GAAP expertise3 EMEA Accounting & Tax Compliance Center © 2010 Deloitte LLP. Private and confidential
    • Local compliance in the global finance pyramid • Financial Planning & Analysis •Strategic Decisions •Key Business Policies •Capital Expenditures •Determination of Reserve Levels •External Reporting •Cost Accounting Local language •Business Analysis FP&A Local expertise Control Local presence GLOBAL ê Reporting LOCAL Local •Tax Filings •Statutory Reports & •Management reporting REGIONAL/GLOBAL Global •Shareholder reporting SHARED SERVICE •Routine & Exception Analysis Reportingê Transaction Processing •Accounts Payable: • Invoice Processing, • Payment run, Transaction Processing • Vendor management, … •Accounts Receivable: • Order intake, • Cash application, … •Fixed Assets accounting •General Ledger accounting © 2010 Deloitte LLP. Private and confidential
    • Centralized local compliance in global finance Strategic decisions Financial & Business Controlling Treasury & Investor relations FP&A FP&A FP&A FP&A Control Control Control Control Local Local Local Local & & & & Global Global Global Global Reporting Reporting Reporting Reporting Transaction Processing Transaction Processing Transaction Processing Transaction Processing Shared Services for transactional processing Leverage knowledge, technology & people Process optimization & standardization Increased control over the process and the cost © 2010 Deloitte LLP. Private and confidential
    • Approaching harmonisation: IntroductionThe respective organisations’ CoEs Bracknell Brussels Chicago Washington Chennai Hyderabad Singapore Sao Paulo C&W Deloitte © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationStep 1 – Bring efficiencies in your tax and accounting groupsCreate consulting and compliance teamsCreate benefits of scaleUse your group shared services facilitiesCentralise outsourcing vendors7 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationStep 2 – Make your tax and accounting teams operate globallyIndirect taxes : • tax engines & ERP deployments • Customs regimes • Supply chainCorporate Income taxes : • Transfer pricing • Rulings • ETRAccounting: • Accounting principles • Standardisation of processes • Management reporting8 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationStep 3 – Bring world class compliance technologies and processesTax generation software :•US tax returns•FAS 109 (ASC 740) / IAS 12•VAT return generationGlobal Dashboards & Trackers•US Tax Returns•Indirect Tax Returns & Sales and Use Taxes•Corporate Taxes Returns•Statutory AccountsDual GAAP coded systems•Generating local country TBs•Generating local country VAT returns9 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationStep 4 – Knowledge systemsRegulatory Challenges : • What to keep local • What local specifics to respect, even when centralised • Smoke & mirrors10 © 2010 Deloitte LLP. Private and confidential
    • Knowledge SystemsPortugal - Mandatory Statutory Reports and FilingsReport Name Periodicity E possibility LanguageFinancial ReportingStatutory financial statements Annually Paper PortugueseTax ReportingVAT return Monthly E-filing PortugueseVAT payment Monthly E-filing or Paper English acceptedWithholding income taxes return Monthly E-filing PortugueseWithholding income taxes payment Monthly E-filing or Paper English acceptedStamp tax return Upon request E-filing PortugueseStamp tax payment Monthly E-filing or Paper English acceptedCIT return (Modelo 22) Annually E-filing PortugueseCIT tax payment Annually E-filing or Paper English acceptedCIT advance payment Monthly E-filing English acceptedSpecial CIT advance payment Monthly E-filing PortugueseYearly income tax report - Modelo 30 Annually E-filing Portuguese(payments made to non resident tax payers)Yearly income tax report - Modelo 10 Annually E-filing or Paper Portuguese(payments made to resident tax payers) © 2010 Deloitte LLP. Private and confidential
    • Knowledge SystemsPortugal - Mandatory Statutory Reports and FilingsReport Name Periodicity E possibility LanguageTax ReportingModelo 19 (stock options) Annually Paper English acceptedAvoidance of Double Taxation Forms (Modelo Annually Paper English accepted21 RFI)Avoidance of Double Taxation Forms -Interests and Royalties Intra-EU (Modelo 01- Annually Paper English acceptedDJR and 02-DJR)IES/ Informação Empresarial Simplificada Annually E-filing PortugueseIVNES – Inquérito mensal ao volume de Monthly E-filing Portuguesenegócios e emprego e serviços (INE)PTRE – Inquérito trimestral as empresas não Quarterly E-filing Portuguesefinanceiras (INE)Intrastat report Monthly E-filing English acceptedEcotaxes Monthly E-filing or Paper PortugueseInfarmed report Monthly E-filing PortugueseCash Polling Report - Banco de Portugal Monthly E-filing PortugueseSocial Security file Monthly E-filing Portuguese © 2010 Deloitte LLP. Private and confidential
    • Knowledge SystemsPortugal - Mandatory Statutory Reports and FilingsReport Name Periodicity E possibility LanguageTax ReportingSocial Security payment Monthly E-filing or Paper PortugueseEmployees Income Tax statement Annually Paper PortuguesePersonnel Annual Matrix - Quadro de pessoal Annually E-filing PortuguesePersonnel Annual report - Balanço Social Annually Paper PortugueseInformation to labour authorities of theadmissions or terminations under a fixed term Quarterly Paper PortuguesecontractOvertime report Bi-Annually Paper PortugueseManagement report Annually Paper PortugueseTransfer Pricing File Annually Paper PortugueseTax File Annually Paper PortugueseSAFT - PT Paper English accepted © 2010 Deloitte LLP. Private and confidential
    • Knowledge SystemsPortugal - Mandatory Statutory Reports and Filings • Portugal holds several regulations that set limits to offshore most company activities into a SSC. Country • All books must remain in the country. They shall be certified by an official bookkeeper Summary • Portuguese language is required in most documents and communications with the authorities. Description Minimum/Typical Activities Required in-country Source Accounting Books must be stored in Portugal and Accounting records accessibility must be Código do Imposto immediate. Books must be certified by an official and duly registered “bookkeeper’ sobre o Valor There is a local mandated Chart of Accounts. However, changes are foreseen in this Acrescentado respect. - Código do Imposto Accounting records must be kept in accounting software duly approved by the sobre o Rendimento Portuguese Tax Authorities, monthly updated and in accordance with Official Chart of das Pessoas Accounts. Colectivas Language difficulties: All books, tax reports and communications with the authorities -Lei Geral Tributaria must be done in Portuguese. -Decreto Lei An specific format for the FA report must be respected. nº79/2003 de 29 de Finance- Abril (Plano Oficial de Related Contabilidade) activities required to be Tax & Legal In practice, it is extremely difficult to pay taxes from foreign bank accounts, except for conducted VAT purposes. in-country Treasury The payments to the Social Security and personnel withholding taxes must be done using a Portuguese bank account. Audit A full statutory audit is required depending on the legal type/structure of the Company. Código das To appoint the external auditor, the Company must do it in a quotaholders/ shareholders Sociedades meeting Comerciais Payroll The personnel data should be available in Portuguese and at the companys local Código do Trabalho office, IFRS Is included in the Financial Statements Anticipated A new Official Chart of Accounts and local GAAP are supposed to be implemented as of January, 1st 2010. The accounts as of 1st changes January, 2009 will need to be restated to this new set of books and new applicable rules, in order to be comparable. © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationStep 5 – Consider Cosourcing Solutions•Temporary Measure or•Long Term strategic vision15 © 2010 Deloitte LLP. Private and confidential
    • Centralized compliance: insourcing versus co-sourcingPros ConsInsourcedClose to business Hire/retain qualified peopleDirect management & control Incomplete cross-border coveragePredictable cost Hidden cost of local advisors Inadequate trainings/technologiesCo-sourcedBetter risk management Loss of in-house knowledgeUp-to-date on changes & technologies Longer communication line with businessBetter control of headcount & costBetter cross-border coverage16 EMEA Accounting & Tax Compliance Center © 2010 Deloitte LLP. Private and confidential
    • Approaching Global Harmonisation Deloitte MNC Finance OnLine with Deloitte integrated Management Statutory Calendar Standardized reporting Conversion Local Periodical US entries Corporate Tax GAAP/IFRS (US -> Local filing Reports GAAP) Centre Local Indirect Local Financial Of Tax reporting Statements Excellence 17MNC Financial Deloitte’s Local Software / customized Deloitte ERP ERP office © 2010 Deloitte LLP. Private and confidential17 Copyright © 2010 Deloitte Development LLC. All rights reserved.
    • Our co-sourced model of centralized compliance Deloitte Russian Finance Russia authorities mana- gement Deloitte Serbian Serbia authorities Standardized reporting Shared Service Center Deloitte Turkish Web-enabled Turkey auhorities technology EMEA Accounting German & Tax authorities Compliance Center Spanish authorities Polish authorities Electronic exchange of data18 EMEA Accounting & Tax Compliance Center © 2010 Deloitte LLP. Private and confidential
    • Advantages of centralized compliance • Standard communication • Adding value by making the compliance function easier • To adapt • To audit • To adjust • To reconcile • To automate • To improve • To control • To manage • To change • Single Point of Contact combined with global reach and local expertise19 EMEA Accounting & Tax Compliance Center © 2010 Deloitte LLP. Private and confidential
    • High level view on co-sourced compliance processes Indirect tax Final return Draft return Data review Feedback preparation preparation & submission Shared Service Center Statutory accounting Local mandatory Conversion reporting Statutory MGMNT Compute Tax Financial Audit GAAP to Provision Statements adjustments Local GAAP Standardize d reporting Corporate tax Calculate Determine Compute Determine Tax Tax Provision Corporate FIN 48 Prepayments FAS 109 Tax Return20 EMEA Accounting & Tax Compliance Center © 2010 Deloitte LLP. Private and confidential
    • CosourcingRules of the Game1. Strong Partnership2. A strong PMO function comprising Vendor and Client3. Strong governance, issue resolution, and contracting processes4. Succesful transition and immediate global buy-in through quick wins5. Timely and compliant filings monitored through a global dashboard6. Automation and globally scalable processes7. Global standardization of deliverables8. A continuous process improvement program9. Performance measurement21 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationStep 6 – Looking ahead •IFRS •Conversion of National Tax Legislations •Common Consolidated Tax Base © 2010 Deloitte LLP. Private and confidential
    • Round table - Experiences - Best practices - Do’s & Dont’s - …23 EMEA Accounting & Tax Compliance Center © 2010 Deloitte LLP. Private and confidential
    • © 2010 Deloitte LLP. Private and confidential
    • APPENDIX25 © 2009 Deloitte Belgium
    • Approaching Global HarmonisationData Repositories & Trackers Secure, web- enabled technologies Integrated data storage and global tracking calendar26 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Country eRooms Up to 16GB of storage Up to 4GB per filesize27 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Storing documents, underlying details Capturing key data elements for global reporting Full audit trail28 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Global overview eRoom “Rolling up” all country level entries29 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Global reporting on key data elements Automated xls- exports30 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Access to global tracking calendar Statutory due dates for -Direct Taxes -Indirect Taxes -Financial Statements -And any bespoke statutory or business process31 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers The confirmation task to kick off the process. The calendar is prepopulated with over 100 statutory due dates32 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Web-enabled, global tracker Executive level dashboard on compliance status with drilldown functionality33 © 2010 Deloitte LLP. Private and confidential
    • Approaching Global HarmonisationData Repositories & Trackers Drill down from period status to country status and eventually to individual task and responisble person34 © 2010 Deloitte LLP. Private and confidential
    • © 2010 Deloitte LLP. Private and confidential