emeatmc client conference redesigning tax · emeatmc client conference 1 redesigning tax operating...

EMEA TMCclient conference

1

Redesigning taxoperating model

The Crystal, London9-10 June 2015

During this session we will explore how a large multinational re-designed their TaxOperating Model as part of a finance/tax transformation initiative during a businesscarve-out.

In particular we will focus on:

• Standardising tax processes;

• Defining roles & responsibilities;

• Managing tax process risks; and

• Using outsourcing of certain tax process steps.

Introduction

2© 2015 For information, contact Deloitte Touche Tohmatsu Limited

Background & trends

Client introduction

Tax transformation - theory

Tax transformation - practice

Critical success factors & lessons learned

Agenda


Background &trends


Key tax trendsImportant trends are knowledge and technology availability, regulatorychanges, globalisation, transparency & risk management

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Driver General trend Tax impact

Cost reduction • Economic changescreated need for costreduction

• Standardisation• Outsourcing partners• Automation of processes

Technology • (Tax related) processesare automated

• Combination of IT and tax expertise• Changing workforce skills

Regulatory andsocial change

• Changing regulations,specifically in EU and TheNetherlands

• Ethics and accountability issues• Tax administration relationships (i.e. horizontal

monitoring in The Netherlands)• Stakeholder focus

Transparency andrisk management

• Increased scrutiny offiscal behaviour

• Rules about taxprocesses

• Transparency about operational targets and degree ofcontrol

• Defined responsibilities and upheld through supervision• Tax risks in a business’ internal processes• New legislation (national and international) for

management, supervisors and financial authorities (e.g.,the AFM, the Netherlands Authority for the FinancialMarkets)

• U.S. requires stricter taxprocesses.

• Korea requires disclosure ofTax Control Framework.

• China requires access tointernal tax risk controlsystems.

• Australia assigned risk ratingsto large enterprises.

• India is having more audit-based controls.

• UK requires a SeniorAccounting Officer.

• The Netherlands implementedHorizontal Monitoring.

• Germany requires standardaudit file for tax e-audit.

© 2015 For information, contact Deloitte Touche Tohmatsu Limited

6

ClientIntroduction, vision& background


Introduction to Client

Our vision

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• At Client we strive to make the worldhealthier and more sustainablethrough innovation

• Our goal is to improve the lives of3 billion people a year by 2025

• We will be the best place to work forpeople who share our passion

• Together we will deliver superiorvalue for our customers andshareholders


Finance transformation @ClientA major challenge to reduce our costs and add more value to thebusiness

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2011

Strong finance function

Lack of standardisation

Complex IT /data landscape

2015

New finance operating model

Working in more specialised roles

With centres of excellence (CoEs) and markethubs

Increasingly outsourcing

Process framework APQC level 5/6

RACIs (Responsible/ Accountable/ Consulted/Informed) defined

Move to standard SAP

Overallprogress

Where we aspire to be in 2017

More insights and lessreports

Dramatic reductions in(re-) views

Doing things once in oneplace

Faster, clearer decisionmaking (handshakes)

Working at lower costs

Clearer job roles andcareer paths

Relentless processstandardisation

Standard, consistent data

Integrated IT landscape

Startingpoint


Finance transformation @Client

Our new operating model built around five pillars

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Business partnering co-piloting the business …

… with FP&A CoEs enabling their decision support

… with A&IC driving compliance, data quality andcorrect financials

… with Group Functions providing expert capabilities

… with FinOps at the center of finance operations

and as interface with external suppliers


Tax involvement

Tax stakeholders and processes in scope


Tax involvement

Approach taken to design standard tax processes

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SIPOCS Process FlowsDesign PrinciplesScope

• Confirm process

scope with all

relevant

stakeholders

• Determine roles per

processes i.e.

process owner,

process modeler

• Confirm deliverables

• Understand overall design

principles

• Identify and define tax design

principles

• Define who is the supplier,

customer of the process

• Define the input and output of

the process

• Draft process flows based on

design principles and SIPOCS

(suppliers, inputs, process,

outputs, and customers)

Overview Deliverables:


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TheoryFinance/ taxtransformation


Tax transformation

Four enablers

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• Process design & tax policies• Process improvement &

optimization e.g. Six Sigma, Lean• Accessibility & awareness• Compliance attestation

• Business partnering• Organization design & governance• Shared services & off-shoring• Outsourcing (advisory)

• Competencies, roles &responsibilities

• Training & development• Incentives, retention & succession

planning• Recruitment

• Data & systems architecture• Systems implementation integration• Application management• Security & control Information

&systems

Policy&

process

Talent&

people

Structure&

organisation


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PracticeHow Client tax departmentfacilitated carve-out


Tax operating model

Approach taken to facilitate carve-out

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Detailed Tax Process Activities Roll outAlign Process FrameworkScope

• Standalone tax

processes need to be

validated and tailored

for NewCo

• Clarity on tax

processes and RACI

is needed to decide on

outsourcing model

and assure training of

new hires

• Leverage on process

standardization and

realize cost reduction

• Understand which tax processes

need to embedded in NewCo

• Prepare and hold process

workshops

• Collect knowledge

• Hold RACI workshop

• Align and validate

• Handover tax processes, incl.

RACI, controls to NewCo

• Onboarding Tax team NewCo


Tax operating model

In this case we will focus on VAT/GST

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VAT/Goods and services tax (GST)is embedded within variousfinancial processes


Policy &process

Information&

systems

Policy&

process

Talent&

people

Structure&

organisation

© 2015 For information, contact Deloitte Touche Tohmatsu Limited 17

Validate tax processes and process steps percountry/tax typeBased on standardized tax processes

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Policy&

process


Talent &people

Information&

systems

Policy&

process

Talent&

people

Structure&

organisation

© 2015 For information, contact Deloitte Touche Tohmatsu Limited 19

Map full time employees retained organisation

Based on standardized tax processes

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Talent &people


Structure &organisation

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Information&

systems

Policy&

process

Talent&

people

Structure&

organisation


Choose sourcing model

Sourcing model based on operating model

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Structure &Organisation


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Benefits & criticalsuccess factors


Tax involvement

What are the benefits?

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Fully integratedprocesses

Standard ITsolutions

Standard reports/data

More efficient

More insightsand less reports

Dramatic reductions in(re-) views

Doing thingsonce in one place

Faster,clearer decision making

Working atlower costs

Clearer job roles andcareer paths

Standard,consistent data

IntegratedIT landscape

Relentless processstandardization

Realized Benefits Tax Involvement

Business Objectives


Tax transformation

Critical success factors

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• The finance/ tax and technology organizations must be “joined at the hip”

• Be clear about goals

• Don’t “boil the ocean”

• Visioning is completed at the beginning of the project

• Change management is critical

• It’s about the data

• Run the project like you want to run the function


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Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. With a globallyconnected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insightsthey need to address their most complex business challenges. Deloitte’s more than 210,000 professionals are committed to becoming the standard of excellence.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “DeloitteNetwork”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustainedby any person who relies on this communication.

© 2015. For information, contact Deloitte Touche Tohmatsu Limited. 26

emeatmc client conference redesigning tax · emeatmc client conference 1 redesigning tax operating...

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