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International Tax

Tax technology helps you with international tax and regulatory changes

Michael Ferguson  

Michael Ferguson  

International tax professionals can feel the winds shifting. Upcoming developments in international tax regulations — plus ongoing disruptions such as digital transformation, marketplace volatility, and remote work — are building the perfect storm. You need to prepare your tax team to keep your organization’s head above water. But that’s easier said than done if you’re relying on manual processes and legacy tools.

Although you can lean on outside advisors and consultants for support, these services aren’t repeatable, don’t scale, and are expensive. You must access and share up-to-date regulatory information in every jurisdiction where your organization operates while automating critical tax preparation processes.

International tax software can help your tax team streamline weighty research tasks, forecast the tax impact of different scenarios, simplify completion of tax returns in the US and internationally — and weather the upcoming storm.

New regulations are on the horizon

Changes abound. For example, new documents from the Organization for Economic Cooperation and Development (OECD) on Base Erosion and Profit Shifting (BEPS) address the taxation of the digital economy and introduce a global minimum tax. At the same time, the EU is proposing public country-by-country reporting requirements. Similarly, the Mandatory Disclosure Regime (MDR) and EU DAC6 Directive 2018/822 for reporting for cross-border arrangements are keeping tax teams up at night with the threat of heavy fines for noncompliance.

All of these regulations will require a proactive, agile strategy and planning on the part of your tax team. If you’re still using manual processes and disconnected tools, it is time to update your tax technology. You’ll need tools that will help your team ensure compliance, increase efficiency, avoid fines, and protect your organization’s brand reputation for accurate, trustworthy financial reporting.

How tax software streamlines international tax return preparation

Tax return and document management software bring you automation, fast access to real-time data, accurate and easy-to-use reports, analytics, and collaboration tools to help your tax team navigate the new international tax regulations. International income tax software helps you:

  • Standardize key processes, such as determining foreign earnings and profits, US income inclusions deemed paid credits and the foreign tax credit from international operations.
  • Import key data, such as charts of accounts, trial balances, sourcing, country codes, asset information, taxes, and more, combining it with knowledge and scenarios so you can forecast and optimize tax planning.
  • Automatically transfer taxable income calculated for US corporation income tax returns to serve as a starting point for computing foreign tax credits.

Tax technology does all of this and more. Tax platforms are leveraging the cloud and advanced tools such as automated data management, robotics process automation (RPA), and AI to transform formerly opaque manual processes. Application programming interfaces (APIs) connect digital platforms, creating integrated systems of intelligence and adding more value. By automating repetitive work, integrating processes, and enabling intelligent decision-making, international tax software frees your tax teams to serve as advisors to the business. Your teams can then set tax strategies collaboratively and strengthen their standing as valuable partners to your organization.

Save money and eliminate human error with a customized research solution

One of the biggest time hits for an international tax software team is research. Getting and staying current with the regulations in all the jurisdictions in which you operate is a never-ending task. But an effective international tax software solution can relieve you of this burden with personalized research based on your specific global footprint. Sophisticated research solutions help you to:

    • Simplify research processes and make them more efficient. A tax and accounting research solution should aggregate information from trusted public sites and use AI intelligence and machine learning to deliver relevant content, simplifying knowledge gathering and analysis.
    • Use intelligent search to get fast answers to questions, identify scenarios you may not have considered, get in-context news updates as you’re working, find forms easily, and calculate withholding.
    • Empower teams by saving and sharing research, setting up and routing tasks to the appropriate party, creating rules, and automating processes.
    • Create an interactive analysis of upcoming changes based on your organization’s global footprint, interests, entities, cross-border transactions.

Consider CHRISTUS Health, a nonprofit that looked to expand within Latin America and needed its international tax team to advise it on the new tax codes it faced. Steven Hurst, CHRISTUS Health’s director of international tax, could not conduct all of that research in-house. He could have tapped outside advisors for this work. But he knew that they would charge a premium for their services, as well as offer unfocused insights. Instead, he chose Thomson Reuters Checkpoint Edge™ for both US and international tax research. “At the end of the day, I found tax savings of about $5 million …. So, when I was bringing value-added ideas through the help of Checkpoint Edge, our CFO was very glad to see that,” Hurst says.[1]

Advanced international tax technology such as Checkpoint Edge and the ORBITAX International Platform enables tax teams to do upfront research to identify and quantify tax exposure, explore the tax implications of different management structures, and compare tax rates across jurisdictions, among other things. By providing easy-to-use information and tools, these solutions help teams limit the use of outside advisors, reducing 90 percent of this cost.

Stay ahead of the weather with international tax software

With a robust tax software solution, your tax team will weather the coming storm and emerge stronger than ever.

Simplify your international tax research, planning, and preparation this year — find out more about International Income Tax, Checkpoint Edge, and the ORBITAX International Platform.

 

For more articles to help you transform your tax department, read our latest blog posts:

[1] “CHRISTUS Health Cuts International Tax Research Costs by 90% and Identifies $5 Million in Tax Savings,” case study, Thomson Reuters, 2015.

 

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