Thomson Reuters Poll Reveals Majority of Tax Departments Working without Technology Strategy

Australian Tax Office and industry discuss challenges and risks of international tax reform

December 7, 2014
Grace Harvey
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SYDNEY, December 5, 2014 — At Thomson Reuters annual tax and accounting industry conference held recently in Sydney, a real-time poll revealed that 71% of delegates did not have a tax technology strategy in place, despite 95% believing a strategy would improve their team’s effectiveness. The conference, SYNERGY “Where Tax meets Technology”, was attended by over 150 tax and accounting professionals and industry leaders from Australia including ATO, ‘Big 4′ and MNCs including General Electric, Morgan Stanley and Vodaphone.

Panel discussions and working groups were held on tax and technology trends, key legislative updates and the future state of tax departments.

Key discussion highlights have been extracted and summarised:

Increasing reliance on tax technology to address compliancePaul Brindle, managing director, APAC and EMEA for the Tax & Accounting business of Thomson Reuters, opened the conference by drawing delegates’ attention to the importance of adopting a tax technology strategy to fit the changing role of tax departments. Brindle highlighted trends such as cloud based tax solutions, the ATO’s Standard Business Reporting (SBR), country by country reporting and the convergence of tax and finance teams. He also commented on how businesses are now looking for more innovative workflow tools to manage and siphon ‘decision making data’ through centralized platforms given higher cost pressures and increased scrutiny from local tax authorities.

BEPS a key focus for Australian Tax Office – Following the recent G20 summit in Brisbane, aggressive tax planning and the OECD’s response plan were debated with key industry leaders. Despite 38% of delegates revealing they were discussing a BEPS response strategy within their business, panelists asserted that the industry doesn’t see BEPS as an issue that needs preparation – yet. The ATO’s Deputy Commissioner for BEPS, Michael O’Neill, stated that “Success will require coordination and alignment in implementing any reforms. Some firms and advisers are already adapting their tax structures or systems. This is partly because of their risk profile, reputation management, or need for ‘business readiness’ to adapt to earlier changes like automatic exchange of information or country by country reporting. Others are taking a ‘wait and see’ approach”.

Critical errors in GST management present dangersKPMG’s Indirect Tax team Dermot Gaffney and Barry Sullivan, asserted that tax directors are expected to be accountants, lawyers, systems analysts and logistics managers in the modern tax department, particularly in regard to increasing data sharing requirements. Any change to the Australian GST rate or tax base will also present a real issue for tax directors.  Implementing such changes in an ERP system typically requires careful planning and execution to ensure that no unintended consequences result. Our experience with rate/rule changes across Europe during the GFC have shown us this. Gaffney championed the value of using technology, stating “you may think you know the [tax] issue, but technology will prove it beyond reasonable doubt”.

SBR uptake predicted to increase – The ATO’s Ben Coady presented the second plenary session on the Government’s technology reinvention, taking delegates through a SBR update and the ECAP pilot, explaining that it was the tax office’s mission to leverage existing business systems and become a “contemporary, more service oriented organisation”. Coady also stated that “transparency is a two way arrangement” and engaging with the community better would create better results for all stakeholders.

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