I have recently returned from the TP Minds Americas Transfer Pricing Summit in beautiful Miami, Florida where I had the privilege of presenting a session on entitled: “New BEPS Regulations and Country-by-Country Reporting: Practical Steps To Compliance.” I was fortunate to be joined by Sharon Rosiak, International Tax Manager and BEPS Action Plans Implementation Lead from one of our great customers DuPont.
Together, we were able to share with the audience information surrounding BEPS based on our various experiences since the regulations were released last year. We focused on why MNE’s should be concerned about BEPS and Country-by-Country reporting regulations, how MNE’s are preparing for these new regulations, how to build a BEPS compliance strategy and how technology can assist with BEPS compliance.
Based on a study by Thomson Reuters and TP Week in late 2015, almost 75% of corporate executives, tax and transfer pricing directors told us that they were either not prepared or unsure if they could put more resources towards compliance with BEPS measures. It’s important to understand that if your company operates in certain jurisdictions you will be required to report in each country you do business – even if your home jurisdiction has yet to commit to comply with BEPS. This list of countries is evolving each month.
DuPont is currently preparing for this work and developing a transition plan to move from their current state to future state. Sharon nailed it during the session when she said: “Change management is key to ensuring you have control over the process year-over-year and data definitions stay clear.” Thus far, they have performed a gap analysis, reviewed CbC templates, evaluated requirements of the OECD and basis for reporting data (statutory v GAAP). All of this has been completed and they have now landed on a methodology for CbC data collection.
All of this preparation and work that DuPont and many other MNE’s I talk to are doing is absolutely necessary. During the session at TP Minds, the room was split – half had already conducted gap analyses and either started or completed projects but the other half has done nothing yet to prepare. I’ll tell you what I told the room – don’t wait any longer! You must get ready for Action 13 and BEPS compliance.
Analysis and pilot projects are just one step in the process. Determining the need for a technology solution – whether you have one currently or not – to manage the data and consistently and accurately manage the CbC data will be next. Aligning the right technology along with planning and process will be the winning formula for BEPS compliance.
There are so many challenges that MNE’s face throughout this process. Partnering with a company like Thomson Reuters can help you navigate the complexity and help you build a process that is efficient, transparent and repeatable.
Don’t get left behind! For more insights from our survey, download our report and infographic.