Knowledge sharing

Saturday, April 22, 2017

More attention for Transfer Pricing

Many countries nowadays implement the BEPS recommendations such as the ‘master’ and ‘local’ file and the ‘Country-by-Country’ report. In general, this not only leads to an aggravation of Transfer Pricing (hereafter: TP) compliance activities, but also results in the potential discovery of errors that were previously undetectable. Indeed, TP processes are generally not (yet) automated and analysis activities regarding TP are primarily executed manually.
This situation makes it challenging to have all relevant tax data provided in time. This applies to both the collection of the required source data, as well as the TP analysis itself. Often, the supplied formats and templates are unusable or have to be ‘manually’ modified in Excel in order to be used.

The current trend is that increasingly more detailed information is necessary for specific products or services; ranging from who the order was placed by to details about the applied margins for service – and goods transactions and the conditions under which these took place. Timely access to such source data has thus become even more important.

This is also the ‘overlap’ with data required for the indirect tax function. Cross-border intercompany transactions form a risk area that will be included in the VAT risk matrix – risks that exceed the risk appetite – by every multinational and that requires efficient monitoring and checks.
  1. Introduction: Relevant tax data from Transfer Pricing and VAT: explaining the ‘Why’, ‘What’ and ‘How’
  2. The auditor is not (yet) a risk analyst
  3. New tax legislation in the UK: 'Tone at the top'
  4. More attention on Transfer Pricing
Above is a translation of article published in Vakblad Tax Assurance. Dutch version can be downloaded for free: Download click the link

Saturday, April 15, 2017

New legislation UK: Tone at the top

In an increasing number of countries, laws and regulations are established that force companies to be transparent with regard to their handling of tax risks, (fiscal) risk management, risk appetite – also in relation to tax planning – and the way of dealing with tax authorities.
This concerns the actual fiscal management, including the way in which the company makes tax decisions, for instance regarding distributed information about the systems and the means used for effective monitoring of fiscal risks. 
The Finance Bill, that was established in 2016 by the United Kingdom, forces the Board of Directors of British multinationals not only to compose a tax strategy, but also to publish it. An important new aspect of this Finance Bill is that it obliges one person within the Board of Directors to be assigned the responsibility for the tax strategy. 
The power of this legislation resides in the fact that it forces the Board of Directors to actually determine a position regarding the company’s tax morality. This is recorded in a public statement, which makes it an important criterion in measurement and evaluation of the performance of the Board of Directors itself (fiscal KPI).
Supervisory bodies such as the Supervisory Board (and auditors?) will have to evaluate whether the board indeed conforms to the formulated fiscal norm. 
Moreover, as appears from the parliamentary history, it is expected that companies that have not published their business strategy are more likely to accept a higher risk appetite with regard to tax risks, compared to companies that have defined and formally published a strategy, both internally and externally.
There is a clear difference between this new legislation and existing initiatives such as the Senior Accounting Officer (SAO) regime in the UK. Whereas SAO is aimed at adequate tax accounting specifically, the new legislation goes beyond the SAO because it requires companies to provide insight into the business strategy with regard to taxes. 
We think that this type of legislation realizes the objective measurability of the ‘Tone at the top’ in the fiscal domain. Without ownership and active involvement of the Board of Directors, the realization of vast changes or large investments is a hopeless mission when coming from change management.
By placing the responsibility for the execution of the fiscal strategy on the Board of Directors, the tax division will receive the tools required for adequate execution of its function – mandate, resources, budget etc. – much faster. This will be amplified when signals from external sources – the auditor and the tax authorities – that promote prioritizing of taxes, also reach the Board of Directors. 
The assignment of accountability, the composition and publication of the tax strategy would be an improvement of the current ‘Horizontal Monitoring’ policy in the Netherlands, as it brings the fiscal responsibility to the Board of Directors.
In practice, the Horizontal Monitoring relies too much on the relation between the Taxpayer coordinator (account manager) of the Dutch tax authorities and the Head of tax of the company. 
  1. Introduction: Relevant tax data from Transfer Pricing and VAT: explaining the ‘Why’, ‘What’ and ‘How’
  2. The auditor is not (yet) a risk analyst
  3. New tax legislation in the UK: 'Tone at the top'
  4. Next week: More attention on Transfer Pricing
Above is a translation of article published in Vakblad Tax Assurance. Dutch version can be downloaded for free: Download click the link

Tuesday, April 4, 2017

Partnership between Key Group, SNI and ConVista

A partnership is closed between the Key Group, SNI and the international operating SAP consultancy firm 'ConVista Consulting' with offices amongst others in Madrid and Barcelona. Key Group and SNI operate from Netherlands, Poland and Turkey.

Who we are

In order to establish synergies to support business SAP challenges of our clients we have setup a joint venture initiative in the past. Tax SAP experts - KEY Group and Phenix Consulting - developing together with SNI a global development partner of SAP and leading software company in the area of e-invoice, e-bookkeeping, e-archive, e-ticket.

SNI's core business is to provide SAP certified add-ons for legal compliance to a large number of global well-known companies. We have therefore access in-house to senior Tax SAP experts working together with SAP experts (functional and technical). That means our turnaround time is fast and our quality is very high.

A partnership is closed with the international operating SAP consultancy firm 'ConVista Consulting' with offices amongst others in Madrid and Barcelona. Our partnership relates to distribution, implementation and maintenance support (Spanish language) for our SAP SII add-on solution for Spain.

ConVista is an experienced consulting firm with a large track record in the design and installation of financials & treasury applications with SAP. We offer comprehensive IT consulting services complemented by custom software development. ConVista provides a complete service offering from a single source. Streamlined processes, a higher degree of automation and shorter project durations serve as indicators for improved efficiency. Expertise in process, technology and methodology form the fundamental components of our work. We combine long-lasting experience in the implementation and delivery of large programs with in-depth knowledge of treasury applications from SAP.

Quienes somos

Hemos desarrollado una iniciativa conjunta con el fin de establecer sinergias para ayudar a nuestros clientes en los desafíos de negocio de SAP. Los expertos en impuestos SAP - KEY Group y Phenix Consulting - forman junto con SNI un partner global de SAP y una compañía de software líder en el área de factura electrónica, e-book, e-archive, e-ticket. Además nuestro partnership con ConVista nos permite dar cobertura a nuestros clientes en numerosos países, facilitando la implantación y mantenimiento de nuestras soluciones.

La principal actividad de SNI consiste en proporcionar add-ons certificados por SAP para cubrir los requisitos legales en un gran número de empresas ampliamente conocidas. Por este motivo disponemos de expertos senior en el área de impuestos que trabajan conjuntamente con expertos de SAP (funcionales y técnicos), lo que nos permite un tiempo de respuesta rápido y una alta calidad.

España 1 de julio de 2017: Suministro Inmediato de Información a las autoridades (SII)


A partir del 1 de julio de 2017, más de 62.000 empresas estarán obligadas a gestionar el IVA de forma electrónica. Se trata de un nuevo sistema electrónico para la declaración telemática de los libros de registro del IVA, que nace con el objetivo de agilizar el cumplimiento fiscal y las devoluciones de este impuesto.

La nueva plataforma de SII se centra en la obligación de la emisión y declaración electrónica del detalle de las facturas emitidas y recibidas por parte de una empresa.

De esta forma los libros registro de IVA se constituyen de forma automática, a través del envío recurrente sobre el detalle de las operaciones realizadas por una compañía. El plazo máximo de tiempo otorgado por la AEAT para el envío de la información es de 4 días hábiles ( 8 durante el segundo semestre de este mismo año)

Así pues, el modelo impulsado por la AEAT permitirá comunicar en tiempo real las operaciones comerciales realizadas por las compañías, incrementando la rapidez y eficiencia del control tributario y fiscal.

SAP Solution para el SII

IN ENGLISH

SAP Solution para el SII. Hemos desarrollado una solución integrada en SAP que da cobertura a los siguientes procesos:
  • Selección automática de documentos/transacciones registradas en los módulos de SD y FI/AR/AP y conversión en eDocuments
  • Clasificación de los eDocuments en torno a los requerimientos informativos del SII a través de “envelopes”
  • Generación de los mensajes XML de comunicación con la AEAT
  • Comunicación a través de Web Service del envío y recepción de los mensajes XML requeridos por la AEAT
  • Gestión de los certificados homologados por la AEAT para garantizar el no repudio de la información intercambiada
  • Integración de los mensajes resultantes de la validación realizada por la AEAT sobre la información enviada
El Cockpit SII ofrece las siguientes funcionalidades:
  • Desglose ampliado de la información financiera en el Edocument
  • Muestra datos de cabecera y del desglose de la factura en el Edocument
  • Muestra el mensaje XML constituido en la pantalla
  • Desglose de las transacciones de origen en SAP
  • Muestra el seguimiento y estado del Edocument
  • Almacena claves de aprobación (CSV) de la Agencia Tributaria
  • Implementación de workflows de aprobación previos a la comunicación a la AEAT
  • Opción de supresión lógica de documentos electrónicos (por ejemplo, para cancelar / traspasar facturas AP en SAP debido a errores de contabilización)
  • Cargar desde Excel transacciones / informes de aplicativos externos no SAP
  • Generación de los mensajes XML a la Agencia Tributaria para completar el proceso automatizado de envío electrónico

Características generales del add-on

Las soluciones integradas SAP e-invoice / SAF-T tienen las siguientes características:
  • Totalmente integrado en SAP sin una interfaz o software externo
  • Independiente de la versión y actualización de SAP, implementado sin modificación del core
  • Área de nombres para todos los objetos registrada globalmente “/SNI/”
  • Lenguaje de programación ABAP, idioma del producto en inglés
  • Instalación realizada simplemente mediante un archivo de transporte externo
  • Todos los desarrollos bajo un paquete
  • Datos XML almacenados en tablas /SNI/
  • Compatibilidad – Uso de XI/PI o integradores de facturas electrónicas
  • Funciones SAP estándar disponibles (variantes, pantallas de selección, etc.)
  • Autorización SAP estándar
  • Pantallas fáciles de usar
  • Tablas personalizadas propias
  • Códigos y menús de transacciones propios

Sí, el add-on es escalable

El add-on es escalable. Algunas configuraciones son específicas de cada país y otras son compartidas. SAF-T está disponible para Francia, Polonia, Lituania, Noruega y ahora también para España (SII). Los nuevos requisitos en tiempo real para Hungría e Italia ya están en desarrollo. Nuestro objetivo es tener add-ons para todos los países que implementan la presentación de informes SAF-T.

Quienes Somos

Hemos desarrollado una iniciativa conjunta con el fin de establecer sinergias para ayudar a nuestros clientes en los desafíos de negocio de SAP. Los expertos en impuestos SAP - KEY Group y Phenix Consulting - forman junto con SNI un partner global de SAP y una compañía de software líder en el área de factura electrónica, e-book, e-archive, e-ticket. Además nuestro partnership con ConVista nos permite dar cobertura a nuestros clientes en numerosos países, facilitando la implantación y mantenimiento de nuestras soluciones.

La principal actividad de SNI consiste en proporcionar add-ons certificados por SAP para cubrir los requisitos legales en un gran número de empresas ampliamente conocidas. Por este motivo disponemos de expertos senior en el área de impuestos que trabajan conjuntamente con expertos de SAP (funcionales y técnicos), lo que nos permite un tiempo de respuesta rápido y una alta calidad.

Contact us for more information


AEAT FAQ

SAP Solution para el Suministro Inmediato de Información (SII) en España


La Agencia Tributaria implanta un nuevo sistema de gestión del IVA basado en el Suministro Inmediato de Información (SII). El denominado “IVA online” es un procedimiento de gestión telemática u online con la Agencia Tributaria (AEAT), mediante el cual las empresas tendrán que comunicar los registros de facturación (no las facturas) de forma electrónica. Con esta información, la AEAT irá configurando, en tiempo real, los distintos Libros de Registro.

Solución con SAP add-on

IN ENGLISH

En España, el nuevo sistema de declaración del IVA entrará en vigor el 1 de julio de 2017. El nuevo marco regulatorio tendrá un impacto enorme en muchas (multi) nacionales que ejecutan SAP. Los sujetos pasivos afectados tendrán sólo un par de meses para adaptar su ERP a este nuevo escenario lo que constituye un verdadero reto. Si no se realiza en los plazos estipulados las compañías incurrirán en sanciones, incrementando el riesgo de padecer una auditoría fiscal.

La buena noticia es que contamos ya con una solución para el SII integrada en SAP. El nuevo marco regulador no es algo nuevo para nosotros, ya que hemos desarrollado en el pasado reciente soluciones similares para Polonia, Lituania y Noruega.

Hemos desarrollado una solución mediante la cual la presentación electrónica de los datos requeridos de facturas AR/AP está totalmente integrada en SAP, sin necesidad de una interfaz o software externo. Con esta solución, la presentación de las facturas solicitadas se puede realizar de forma automática y cumpliendo los plazos estipulados. Nuestra solución SII para España está lista y se puede ejecutar a través del propio entorno SAP.

¿Cuáles son los aspectos clave del SII?

  • Suministro de los registros de facturación (no confundir con facturación electrónica) de forma INMEDIATA
  • Primera piedra hacia la creación del Borrador de Autoliquidación de IVA
  • De obligado cumplimiento para Grandes empresas, Grupos de IVA y REDEME
  • Simplificación de las obligaciones informativas (Elimina 347, 340, 390* y Libros Registros IVA) y reducción de los errores en las declaraciones al poder “contrastar” la información con la base de datos de la AEAT
  • Ampliación del plazo en 10 días para la presentación de Autoliquidaciones de IVA periódicas
  • Tipos de Libros a comunicar (Facturas Emitidas, Recibidas) y de carácter anual (Bienes de Inversión y Importes en Metálico)

*La información del 390 que no se puede obtener a través del SII se suministraría como información adicional en los modelos 303 y 322 del último período de liquidación

  • Plazos 4 días naturales ( 8 durante el 2017) excluyendo del cómputo fines de semana y festivos nacionales
  • Facturas Expedidas desde la fecha de expedición de la factura
  • Facturas Recibidas desde la fecha de registro contable de la factura
  • Importaciones desde la fecha del documento de aduanas
  • 1 Julio 2017 pero existe la obligación retroactiva de envío de los libros del primer semestre del año en el periodo de que va desde el mismo 1 de Julio al 31 de Diciembre (salvo las acogidas al REDEME)
  • Comunicación de mensajes vía Web Service mediante protocolo HTTPS o Formulario Web
  • Utilización de certificados homologados por la AEAT

Quienes somos

Hemos desarrollado una iniciativa conjunta con el fin de establecer sinergias para ayudar a nuestros clientes en los desafíos de negocio de SAP. Los expertos en impuestos SAP - KEY Group y Phenix Consulting - forman junto con SNI un partner global de SAP y una compañía de software líder en el área de factura electrónica, e-book, e-archive, e-ticket. Además nuestro partnership con ConVista nos permite dar cobertura a nuestros clientes en numerosos países, facilitando la implantación y mantenimiento de nuestras soluciones.

La principal actividad de SNI consiste en proporcionar add-ons certificados por SAP para cubrir los requisitos legales en un gran número de empresas ampliamente conocidas. Por este motivo disponemos de expertos senior en el área de impuestos que trabajan conjuntamente con expertos de SAP (funcionales y técnicos), lo que nos permite un tiempo de respuesta rápido y una alta calidad.

Contact us for more information


AEAT FAQ

The auditor is not (yet) a risk analyst

The term materiality has many meanings and definitions. Boundaries of materiality are primarily determined based on personal estimations. This can be estimations by auditors, risk management departments, company directors, etc.

The term materiality, used as a quantitative norm, then serves as an approval boundary. Evidently, the materiality used to determine the tax risk appetite of businesses is significantly lower than the materiality used by the external auditor in the annual audit.

The external auditor’s task is only to provide an opinion whether the annual accounts provide a true and fair representation of the company's affairs. He or she is not asked to provide a statement regarding the accuracy or the acceptability of the submitted return for corporate tax, income tax, VAT etc. The examples of tax situations listed below should, however, also receive full attention from auditors.

These stock market listed companies have after all, been obliged based on the SEC rules to report their risks to their investors:
  • Google avoided €227 million in taxes in Italy. Google paid £130 million to the British tax authorities and agreed to pay higher taxes in the future. In France, the tax authorities demanded €1.6 billion from Google.
  • Apple paid €318 million as a settlement to the Italian tax authorities after a two-year fraud investigation. Apple missed a deadline to pay €13 million in taxes to Irish authorities in the context of state aid. Due to the special treatment given by the Irish government, the effective tax rate was just 0,05%.
  • Facebook (FB, Tech30) disclosed that the IRS conducted an investigation into the way it moved assets to an Irish subsidiary to avoid higher taxes. According to Facebook’s SEC filing, the amount totals $3 - $5 billion, plus interest.
  • Coca-Cola was found to to owe the US tax authorities $3.3 billion, plus interest, based on an audit by the IRS. Profits were incorrectly recognized in foreign countries, rather than the US.
In case these tax-related issues are considered individually per county and per company, it could be put into question whether these matters are also material for the auditor. Notably, the media also discuss the reputation of these companies. Any potential reputational damage and/or fiscal uncertainty might impact not only the share price but also external relations including that with the tax authorities.

The loss of tax income due to the movement of assets to low tax rate jurisdictions is conservatively estimated to total between $100 and $240 billion.

The amount of media attention, public indignation and political reactions these cases have received – including for instance that of US senator and (former) presidential candidate Bernie Saunders – emphasize the differences in tax morality.

Why should ordinary citizens comply with tax obligations, while multinationals or soccer players are attempting to avoid paying a ‘fair share’ of taxes by means of tax-saving structures? Both media and politics have given a great deal of attention to cases such as the ‘Panama Papers’, ‘Lux Leaks’, ‘The Netherlands Tax Haven’ and ‘Football Leaks’.

In the context of an investigation regarding state aid, the European Commission states that providing tax rulings (advance pricing agreements; APA’s) should not result in situations in which some taxpayers pay less than other taxpayers under the same circumstances. As a result of the Panama Papers, many Corporate Service Providers, shell corporations and advisors are interrogated by the Dutch parliament with regard to tax avoidance and tax evasion.

These are companies without any significant assets or activities in the Netherlands that solely serve as a vehicle for shifting interest and royalties within international companies. Due to the application of tax treaties, this construction results in a significantly lower corporate taxes. During his presidential campaign in 2008 Barack Obama illustrated the issue:

“There’s a building in the Cayman Islands that houses supposedly 12,000 U.S.-based corporations. That’s either the biggest building in the world or the biggest tax scam in the world, and we know which one it is.”

Evidently, we’ve entered a broader discussion, reaching beyond the question of what is tenable based on fiscal laws and regulations. Beside financial risks – that can be material – it concerns reputational damage, which can, as previously mentioned, negatively affect share prices.

Business operations can thus be fiscally appropriate, complying with tax laws and regulations, yet deemed unacceptable according to societal norms. This is a relatively new phenomenon in terms of reputational risks that affects the risk management from the overarching ‘business control framework’.

Questions that need to be asked include for instance: does the current business model still fit the ‘reconsidered’ business strategy?

 In terms of tax revenues, a global trend is emerging shifting from direct to indirect taxes. The rates for VAT are increasing, whereas the rates for corporate tax are decreasing. An average multinational has over €5 billion in indirect tax flowing through the business. A mistake of one percent can make the difference between profit or loss. This is material, also for an auditor.


  1. Introduction: Relevant tax data from Transfer Pricing and VAT: explaining the ‘Why’, ‘What’ and ‘How’
  2. Next week: New tax legislation in the UK: 'Tone at the top'

Above is a translation of article published in Vakblad Tax Assurance. Dutch version can be downloaded for free: Download click the link