Tax teams in multinational groups are currently grappling with an array of challenges in the realm of data collection and management. Tax functions must adapt and evolve in this era of rapid technological advancement where data has become a driving force for business decisions.
Tax teams face mounting pressures to manage and harness data effectively in the fast-paced business landscape. BEPS (Base Erosion and Profit Shifting) Pillar Two regulations present one of the most notable challenges.
This newly emerging tax framework demands meticulous data collection and reporting. However, BEPS Pillar Two is just the tip of the iceberg. Tax teams are also confronted with intricate regulatory regimes, such as Controlled Foreign Company and transfer pricing rules. These regulations necessitate extensive data sourcing, encompassing financial and non-financial data alike.
A noteworthy hurdle is the varying granularity of financial data required for tax disclosures. This variance adds another layer of complexity, making the tax function a perpetually “business as usual” task.
An essential aspect of overcoming data challenges lies in comprehending the diverse data sources indispensable for tax compliance. These sources encompass data generated by the business itself, including transaction details for indirect tax returns and employee remuneration data for corporate income tax calculations.
To effectively address this challenge, tax teams must categorise data sources and establish efficient mechanisms for collecting, updating, and storing the data.
Here are three vital questions to guide you:
Effectively tackling data complexities requires a holistic approach involving People, Processes, and Technology. Engaging with stakeholders, understanding data processes, and leveraging appropriate technology are key factors in this equation.
Integrator empowers tax teams to thrive amidst the ever-evolving international tax landscape. As we venture further into the data-driven tax world, the ability to adapt, collaborate, and harness technology will define the success of the modern tax function.
After four years in business school and working for multinational clients, Jomar believes he can improve the world through his writings via Public Spectrum, by informing the public on the latest news and updates happening around the government and society. Jomar has eight years experience as a writer and has a degree in Business Administration and Entrepreneurial Marketing.