Tax professionals from the world’s leading brands came together at KNect365’s Tax Transformation Summit in London to discuss today’s hottest topics in the tax function: transparency, transformation and technology.
Summit Chairperson Andrew Burman, Partner at Grant Thornton UK and head of their transformation automation and data analytics team, opened the session explaining how technology is helping to transform the tax function. He talked about the changes that digitalisation is driving: innovations to basic tax operating models, how tax functions are run, how tax professionals interact with other stakeholders, and how corporates interact with advisors. He also highlighted the increased profile of tax professionals and how the tax function is now viewed as a value-added profit centre.
In one of the Agenda Sessions, Jose-Manuel Pedron-Garcia, Global Tax Compliance Process Leader at Michelin, talked about the power of digitalisation, saying that tax-related data represents “opportunity for improvement and opportunity for revenue for your company.” He described how his company utilised the power of technology to recover more VAT than they ever thought possible. “VATBox gave us good visibility into our data and brought us added value. They have improved the compliance and efficiency of our process, reducing Michelin’s involvement.”
He offered tips for companies seeking to move toward digitalisation:
- Internal communication: Make sure each employee understands how they can contribute to improving the amount of VAT the business ultimately recovers.
- Change management: Be proactive about working with all entities to review, challenge, and even change the system or business model to unlock the added value for the company.
- A single process: Deploy a single process with a single pay model from booking the trip to the business justification. The simpler your process, the more value it will bring.
- Collaborate with suppliers: Involve your vendors – hotels, travel agency, etc. – to ensure that the documentation is correct from the start.
He encouraged the audience to take action. “There are a lot of people in your company waiting for you to lead the change that can bring value to your company. Saving money, improving compliance, and improving the process. With a minimum involvement of your teams, I have done it; you can do it too. Lead the change you believe in.”
Mr Pedron-Garcia also joined a panel discussion hosted by Remco Dewaerheijt, VP Tax & Product Strategy for VATBox, about global VAT developments. Other panellists included Ksenija Cipek, Head of Tax Risk Analysis at the Croatian Tax Authority’s Ministry of Finance, as well as John Shuker, Indirect Tax Partner at PwC. These industry leaders offered their personal views and experiences about the digitalisation of VAT for VATBox’s “Industry Leaders Reveal” interview series.
Mr Dewaerheijt opened the discussion with the powerful observation that the digitalisation of our lives is unstoppable, with data doubling every two years. He stated that by the end of 2020, we’d have 44 zettabytes – or 44 trillion gigabytes – of data. The panel then had an open discussion about the effect digitalisation is having on the tax function, with each panellist sharing their own unique point of view on the topic.
John Shuker talked about how, as an intermediary tax advisor, he helps companies like Mr Pedron-Garcia’s strike the right balance in complying with the rules set out by tax authorities, such as those of Ms Cipek. He highlighted that technology represents both a blessing and a challenge and that taxpayers and tax administrations must work together to ensure compliance. He discussed the shift by tax authorities to take an interest in transaction-level data, which has proven to be a real challenge to both small businesses and large companies.
When given the floor, Ms Cipek agreed but stressed that the authorities strive to help businesses become compliant, and not to be a barrier to their operations. She said that most important is “that all data be high quality, and the analysis results will be high quality.” She explains how this analysis is used for risk management. “We are in a virtual world, so we have to be fast and manage this data. We have tools for…forecasting the behaviour of the taxpayers in the short or long time. And we know which taxpayers are fully compliant, are medium risk or are high risk.”
Mr Pedron-Garcia makes the point that “tax data is completely changing the way we are looking at tax.” Ms Cipek agrees, explaining that while “technology always followed the legislation, right now the paradigm is shifting. So sometimes the technology will have a direct impact on the solutions. Technology changing everything. We should be simple, structured, but not too complex if you want compliance.”
Mr Shuker conceded that the easiest way to achieve compliance often involves integrating new systems and looking at new solutions. He made the point that VATBox is a disruptor in the market. He also talked about the changing role of the tax advisor, saying, “It’s important to have people that actually understand the implications of the systems and the business itself and the way the business is going, and that means that you need people that are technology savvy within your tax team and within the business. Digitalisation is one of those opportunities for tax people to seize upon a business change and to also make sure that they’re integrating at least as much future-proofing as we can anticipate at the moment into the new system as its being developed.”
Mr Shuker closes the discussion with a positive outlook for the future. “We need to make sure that companies continue dialogue with the tax authorities and vice versa. There’s quite a lot of variables that we all see more of in the future. But I think [the way forward is] dialogue with the tax authorities, better systems and more real-time reporting and simplifications. Overall, a lot of dialogue is a good thing.”
To learn more about how VATBox empowers financial professionals to make strategic decisions based on their transactional data while ensuring unrivalled compliance and savings, contact us.