Orbitax International Tax Platform
1. What is the Orbitax International Tax Platform?
The Orbitax International Tax Platform (ITP) is a native cloud application made up of a series of fully integrated solutions and tools that target typical recurring tax department workflows.
At a high level the ITP provides the following features:
- In-depth coverage of the tax rules and tax rates for 195 countries, which are maintained and updated daily.
- Maintains the global footprint of an MNE, including keeping track of entities, cross border transactions, and changes to the global footprint via collaboration with relevant stakeholders.
- Continuously links the tax rules to an MNE’s global footprint and creates key reports to be consumed at regular intervals by any and all stakeholders.
- Allows all tax department workflows to be assigned to stakeholders and continuously tracked to ensure they are completed on time.
2. Why now?
MNEs are tasked with keeping up to date with tax laws that are continuously changing.
The globalization and digitization of business has given rise to frequently changing tax rules and regulations, and these changes will only increase in frequency and in scope. Global businesses, particularly those located in the United States, must empower their tax departments with the tools to either keep up with, or get ahead of, this complexity.
Right now, one can place the many complexities and challenges tax teams face in three distinct but related categories:
- Rules effective now
- Rules in various stages of implementation
- Rules being actively discussed
The rules effective now include the most recent changes to the US tax code, passed and signed into law during December of 2017, and the country-by-country reporting provision (“Action 13”) of the Organization for Economic Co-operation and Development’s BEPS initiative.
Rules in various stages of implementation include other actions of the OECD’s BEPS initiative, the European Union’s anti-avoidance directive, and state-level legislation in the United States as a response to the 2017 changes to the federal code.
Rules being actively discussed include:
- the tax treatment of digital goods and services
- a global minimum tax
- making public the country-by-country disclosures introduced by the OECD’s Action 13
- the specter of additional changes to the US federal code, which seems to be contingent on the 2020 presidential election
Now more than ever, MNE tax departments must be continuously aware of changes within the organization.
The tasks that the tax department must manage globally are too broad for a small group of tax professionals mostly located in the corporate HQ to manage.
Because of the multiple tasks and roles, there must be a global system to keep track of all tax department tasks worldwide, not just due dates.
3. Why ITP?
Orbitax has responded with its International Tax Platform, powered by a global tax rules engine which provides in depth coverage of the tax rules and tax rates of 195 countries. The engine is updated on a daily basis, tied to an MNE’s global footprint, and delivered to all stakeholders.
The ITP also includes a solution set to track an MNE’s global footprint, including entities and cross border transactions, and multiple ways for all stakeholders (tax department, non-tax department and even outside tax advisors) to collaborate. The ITP provides a series of tools to assign worldwide tax department tasks to various stakeholders and keep track of their completion. Tasks include auto populating statutory due dates and creating reminder notifications.
A comprehensive series of visualization tools allows any stakeholder to get a summary view of relevant data as well as focus on key measures and outliers.
4. How does it work?
Central to ITP are the highly configurable Analytics (Visualization Platform), which will initially show key default measures. These provide a high level overview of all relevant key metrics for the global operations of an MNE tax department for the current tax year.
This will include metrics such as:
- total # of countries where the MNE is currently doing business
- total # of entities (including the # of entity changes)
- total inter-company transactions
- sub metrics, including:
- total withholding tax
- total law changes impacting the MNE (separated between enacted and proposed)
- total returns due
- total returns filed
- total tasks assigned
- total tasks completed
Filters allow a more detailed view of any subset of the data. For example, selecting Argentina will list only the entities in Argentina, and then allow a list of only cross border transactions involving a specific entity in Argentina.
A second report can then be used to see additional measures that apply to these cross border transactions, including withholding tax rates, future tax law changes, BEPS Action item impact, and presence of a tax treaty. A third page can be used to read the full details of the editorial description of the future tax law change and/or access a link to the full text of the tax treaty if one exists.
The above data is available inside the visualizer because of the series of solutions and tools that a user will interact with to input their global footprint which then gets automatically tagged with the global tax laws that are separately maintained by the ITP on a daily basis. This allows the creation of various reports and tasks, enabling multiple stakeholder to collaborate.
- The Entity Tracker creates your entity chart and intercompany transactions to establish your global footprint, including a historical record of entity data. Permissions can be set to allow multiple users concurrent online access to the entity data. A fully integrated Entity Designer allows visual representation of the entity data.
This entity and transaction data can be exported in various formats. With the help of sophisticated filters, the data can then be imported into other solutions on the platform. Custom reports can be created and distributed to stakeholders at prescheduled frequencies.
- Based on the global footprint, the Due Date Tracker automatically determines all filing obligations around the world based on the Orbitax global tax rules engine.
This includes corporate tax return and payment due dates, VAT return and payment due dates, and various transfer pricing due dates. Examples include the preparation and submission of Country-by-Country Reports and Notifications, Master Files and Local Files, and other transfer pricing related documentation.
Built-in logic also determines whether a filing is required, such as whether a Country-by-Country Report must be filed locally based on automatic exchange conditions between jurisdictions.
As entities are added or removed from the Entity Tracker, the due dates in the Due Date Tracker are synchronized.
- Each due date can in turn generate a series of workflows involving various stakeholders, who can be assigned tasks and timelines for completing the required compliance obligations via the Task Manager, with set alerts delivered directly to their inbox. These tasks may include data gathering, return preparation, review, and filing.
- Once a task is completed, all documents are automatically collected into the Document Repository for future retrieval.
5. Key USPs
- Dashboard & Analytics (Visualization)
- Tying tax laws to global footprint
- Collaboration between stakeholders (tax department, non-tax personnel and outside advisors)
6. Example Workflow
Here is an example of how the Orbitax platform comes together to ensure global tax compliance:
- Sometime after Q4 of 2018, the Entity Designer sends out a scheduled quarterly PDF chart of entities in Asia to a controller in Asia, who edits the PDF to show that a new entity set up in Hong Kong in 2018 is missing.
- This entity is then added to the Entity Tracker, and the global footprint, which is synced with the Due Date Tracker. This immediately creates an alert to stakeholders that the Hong Kong 2018 CbC Notification is due in May 2019. This deadline is based on the daily tax law changes published in the Change Reports Tracker during March 2019 and updated in the global tax rules engine. The Due Date Tracker can then be used to create a series of tasks to track the progress of this Hong Kong CBC Notification Filing.
- Without this integrated series of solutions, your company may not have found out about the new Hong Kong entity or the upcoming notification filing obligation in a timely manner.
Examples of features clients have been requesting over the years, sometimes licensing separate multiple solutions to meet their needs.
Global system for tracking and management of tax compliance
I have been conducting research into tools that can assist us with organizational charting
Perhaps someday we will have access to an international research tool that can allow us to pick a date range, countries, type(s) of tax and date(s) the rate changes became effective. We will like to save the search criteria and then have the research platform email the updated results to users every week, month, quarter or some other desired frequency
UK client currently looking to modernize their current procedures, and take compliance to the next level, and for this they are looking at available platforms
Charting – the ability to see historical information and generate Change Reports
Ability to request additional info from users to complete tax tasks
Track due dates for CbC reports and notifications as well as add custom due dates, track & assign to users/departments
Single solution for all products in one tool