day 2: session 1 transforming today for the …...• investors –e.g. local authority pension fund...

Day 2: Session 1

Transforming today

for the challenges of

tomorrow

The Westin, Singapore26 February 2016

Rony Wuytjens - Deloitte

1

2

APAC Roundtable

Transformation –

why?

© 2016 Deloitte Global Tax Center Asia Pte. Ltd.

“God grant me the serenity to accept the things I cannot change, the courage to

change the things I can and the wisdom to know the difference”

Ignatius Loyola c 1520

3© 2016 Deloitte Global Tax Center Asia Pte. Ltd.

External trends are impacting tax …Transformation why?

© 2016 Deloitte Global Tax Center Asia Pte. Ltd. 4

As business GLOBALIZES … so do tax

obligations together with a pressure for

centralized global delivery

TECHNOLOGY proliferation … fuels

expectations for wholesale process

change, and becomes a catalyst for re-

engineering tax

Transformation of REVENUE

AUTHORITIES … the way they go about

their work

Increased REGULATION makes business

more complex but also more transparent

... raising risk and enabling mainstream

media coverage

TALENT … new skills are needed and

there is a new environment within which

to attract and retain people

New STAKEHOLDERS … have emerged

and we are confronted by a new era of

socially responsible tax

5

Legislative

changes


6

• Control powers of tax authorities

• Disclosure Of Tax Avoidance Schemes

• Generalised electronic filings

• Tax in the Boardroom

• Digital bookkeeping and filing

• Increased Digital Data requests

• Transparency: exchange of tax rulings

The story so far


• OECD’s Base Erosion & Profit Shifting study

• State Aid

• Tax Rulings

• Action Plan on Corporate Taxation

• Unilateral measures

International response


• More taxes and more reporting in more jurisdictions

• Modelling the impact:

• Increased risks or increased ETR or both?

• How?

• When?

What does it mean?


Australia BEPS status

9

Action Status

• Digital economy

• Hybrid mismatches

• CFC

• Interest

• Harmful tax practices

• Treaty abuse

• PE status

• Transfer pricing

• Monitoring

• CbC master/local file

• Dispute resolution

• Multilateral instrument

• GST on digital products effective from 01 January 2017

• New law expected by May 2016

• No change: Australia’s rules meet OECD best practice

• Australia has already tightened its thin capitalization rules

• ATO has already implemented exchange of ruling

• Adopted in negotiation of new/updated treaties

• Dealt with in Multinational Anti Abuse Law eff. 01 January 2016

• Enhanced guidance to help ATO’s administration

• Government estimate BEPS “problem” is 4 to 10% of tax revenue

• Implemented effective January 1, 2016

• Committed to binding arbitration

• Signing expected by end of 2016


10

Pervasive

information

technology


• Ambient computing

• The merging of the physical and the virtual world

• Information rules

• The API Economy (Application Programming Interface)

• Amplified intelligence

• The next generation of knowledge systems

Pervasive information technology


• Cyber and data privacy

• Managing the acquisition and custody of information

• Complexity and change

• Picking a path through the tax technology jungle

Pervasive information technology


13

APAC Roundtable

Transformation –

what and how?


© 2016 Deloitte Global Tax Center Asia Pte. Ltd. 14

Bill Gates

Chairman and CEO of Microsoft

"Everything that can be

invented has been invented”

Charles Holland Duell c1899

US Commissioner of Patents

Thomas Watson 1943

President of IBM

“When we set the upper limit of PC-DOS at 640 KB,

we thought nobody would ever need that much

memory”

http://en.wikipedia.org/wiki/File:Bill_Gates_July_2014.jpg

http://en.wikipedia.org/wiki/File:Bill_Gates_July_2014.jpg

Tax transformed – the “professionalisation” of tax

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People and

organisation

Processes

Systems

Tax Risk Management

Risks

ControlsTest

Report

Tax Policy Framework

Risk

appetite

Decision

making

Control

standards

Oversight

KPIs/KRIsCulture

and

ethics

Accountabilities

Tax Vision, Goals

and StrategyTax Outputs and

Communication


16

Tax policy, risk

and operations


Increasing formalisation of tax policy

17

Accountabilities for taxes getting clearerGroups are increasingly defining their tax policy

Source: Deloitte Global Market Research, 2014

47%

29%

23%No

Yes, for some areas

Yes, for all four areas


Answering key questions

18

People and

organisation

Processes

Systems

Tax Risk Management

Risks

ControlsTest

Report


Risk

appetite

Decision

making

Control

standards

Oversight

KPIs/KRIsCulture

and

ethics

Accountabilities

Tax Vision, Goals


Communication

“How is success

measured?” (KPIs)

“How are key

decisions made?”

(Decision making)

“Who owns each

tax?”

(Accountability)

“What governance

is there over tax?”

(Oversight)© 2016 Deloitte Global Tax Center Asia Pte. Ltd.

Identifying, controlling and reporting tax risks

19

Groups generally have processes for

identifying, controlling and reporting tax risk

More and more third parties have a specific

interest in tax risks and how they are managed

• Tax Authorities – e.g. UK,

Australia, Netherlands, Singapore,

Japan, Spain

• International bodies – e.g. OECD

• The press

• Investors – e.g. Local Authority

Pension Fund Forum

• Analysts – e.g. Schroders, Citi

• Indices – e.g. Dow Jones

Sustainability Index, MSCI World

• NGOs – e.g. Action Aid, Tax

Justice NetworkSource: Deloitte Global Market Research, 2014


Developing a risk-based approach

20

People and

organisation

Processes

Systems

Tax Risk Management

Risks

ControlsTest

Report


Risk

appetite

Decision

making

Control

standards

Oversight

KPIs/KRIsCulture

and

ethics

Accountabilities

Tax Vision, Goals


Communication

“How do we report to

the stakeholders?”

(Report)

“What are our key

tax risks?” (Risks)

“Who are our ‘lines

of defence’?”

(Controls)

“Is Internal Audit

testing tax?” (Test)


Global tax operating models


Increasingly centralised decision-making

22

Global tax operating models: past, present and future

Source: Deloitte Global Market Research, 2012 and 2014


Pressure for continuous improvement

23

Satisfaction (% happy) with current model by driver and method



Evolving the operating model

24

“Do we have the

right scale, roles,

locations?”

“Can we streamline

adjacent

processes?”

“What is the right

in/out/co-source

model?”

People and

organisation

Processes

Systems

Tax Risk Management

Risks

ControlsTest

Report


Risk

appetite

Decision

making

Control

standards

Oversight

KPIs/KRIsCulture

and

ethics

Accountabilities

Tax Vision, Goals


Communication

“Can we leverage

our Shared Service

Centres?”© 2016 Deloitte Global Tax Center Asia Pte. Ltd.

25

Tax

technology


Technology satisfaction levels

26



Plan, budget, responsibility

27



28

WHAT

can and cannot be solved with tax

technology?

solutions are relevant for tax?

do you choose: buy or build your

own?

Tax technology


29

AIM

Tax technology

technology to support both your tax

function as well as your organisation

as a whole (not the other way around)


Tax technology landscape

30

Why look at your tax technology architecture?


31

1. Strategy, Policy, Risk and Operations

2. Compliance Operating models

3. Technology

Conclusion

Interconnections – change management – Communication


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day 2: session 1 transforming today for the …...• investors –e.g. local authority pension fund...

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