Richard Cornelisse

Do we see tax technology as an enabler or as a ‘magic’ way to be and get in control?

In Indirect Tax Strategic Plan on 21/01/2017 at 1:00 pm

  A Tax Control Framework should not operate in silo, but has to be aligned to the company’s business control framework (BCF) and should cover more from a tax risk management perspective than only compliance and financial risks. There are various BCF models developed and therefore differences exist between companies.

That same principle applies when we ‘wish’ for example to copy paste a ‘Best practice tax technology framework’ from one multinational to another multinational. The devil is often in the ‘implementation’ / ‘configuration’ detail as most of the time it is not ‘Plug & Play’. For example the legacy systems, business models and/or the structure of the tax function could be different.

When we talk about tax control framework do we focus nowadays not too much on compliance and financial risks?

What has been designed from a tax planning is not always properly implemented or has changed after implementation due to new business initiatives that are an unknown to the tax function due to lack of visibility or disconnect. That could result in material tax risks. Take for example strategic tax risks such as the management of non-routine transactions:

Open ‘Converting the sales middleman function from Commissionaire to LRD‘ for an example

Technology might be an enabler to manage such change management process better, but the people element (‘the interaction’) – especially if many work streams are involved – are the key drivers that together can realise ‘being in control’ at go-live and beyond.

Anticipating in time on tax developments and take action ‘see the 4 questions I raised and the answer I gave above’ is an other example that highlights why managing change is important from a tax control framework as it impacts all the risk categories including reputational, strategic and operational risks.

Source: From tax strategy to artificial intelligence to automating the tax adviser | Richard H. Cornelisse | Pulse | LinkedIn

From Artificial intelligence to Robocop to indirect tax

In Indirect Tax Strategic Plan on 19/01/2017 at 1:10 pm

 I truly love innovation. The sooner the better, but I consider all the stories about artificial intelligence and robotics still science fiction when this is discussed in connection to indirect tax.

A critical condition for success would be that ERP systems supported by tax technology could actually present real-time all the company’s (intercompany) business transactions. However, real-time access to a company’s blue print is often a recurring bottleneck during business model change (see example ‘Commissionaire to LRD‘).

Certain consultancy firms perform such transaction mapping still via interviews.

Without access to a complete data set, is artificial intelligence not useless?

Automating the adviser

That being said I think much more can be automated and will be automated. I published in February 17, 2012 my article ‘Google the (tax) adviser of the future‘:

[Time stamp 2012!] I am following the developments of Apple’s Siri of and of Google in general with great interest. Siri is the speech recognition engine that Apple uses as a virtual personal assistant for their devices. The software truly understands your questions, searches the web and provides you with answers immediately.

Google’s executive chairman, Eric Schmidt, has conceded that Siri could pose a “competitive threat” to the company’s core search business.

If that is the case, is it not realistic to assume that Google and/or other companies are going to invest a considerable amount of money in developing similar functionalities?

Such competition between these powerhouses will boost technology improvement.

  • Will such technology in the end truly understand all your technical questions?
  • Is a virtual personal assistant going to respond immediately?
  • Is this science fiction or our near future?

I am aware that some people will argue that certain knowhow depends on individual skill sets and expertise. For the moment, they are right, but they might be proven wrong in the future.

Can this also be automated?

What successful examples relate to strategic insight and decision-making? Chess is a strategic game and relates on fact-based information (pieces on the chess board: relevant facts) and a number of possibilities (moves: calculation of the impact of various options combined with overall strategic insight).

  • If a chess-playing computer, Deep Blue, can beat world champion Gary Kasparov in a six-game match by two to one with three draws against, shouldn’t the automation of an adviser’s strategic decision-making also be possible?
  • Deep Blue’s successor – Watson – has beaten Jeopardy champions at their own game. What was needed to make that happen: “natural language processing, searching immense data sets and creating relationships among disparate sources of information to finally culminate in an answer.”

The good news is that the profession of service providing is a people business. We like to be connected to people. Maybe the statement about automating the adviser is a bit too provocative, but I still believe a lot more can be automated than we can currently comprehend.

Having an open mind is the message I want to get across. The only things that probably cannot be automated are our feelings and interactions.

That is why it is and will remain a people business. Last but not least, I don’t pretend to write the strategy plan for Google.

I just admire companies like Google, Apple and Virgin for their innovations and culture. In this blog “Google” represents companies that are technology innovators. The future adviser could therefore be somebody else.

Do you agree?

Source: From tax strategy to artificial intelligence to automating the tax adviser | Richard H. Cornelisse | Pulse | LinkedIn

From tax trends to  assessment to implementation

In Indirect Tax Strategic Plan on 19/01/2017 at 12:59 pm

Lets just assume that tax transparency and disclosure of tax risks to the tax authorities is mandatory in force in every country and that the effectiveness of a tax control framework should be proven.

  • Are OECD’s Standard Audit File for Tax Purposes data requests (monthly and on request) – now rolled out in various European countries – the start of a new beginning for better audits by the tax authorities?
  • Is it likely that tax authorities will get access to more sophisticated tax analytics tools?
  • Do companies need better risk management tools to meet tax objectives set derived from business objectives?
  • Do companies face additional tax risk due to (close to) real time data requests of the tax authorities – implemented for example in Brasil and will be in force in Spain per July 1, 2017 – and does it impact a company’s audit defense, tax risk management, ERP systems and tax technology?

Without doubt, the answer to all questions is a resounding yes.

Source: From tax strategy to artificial intelligence to automating the tax adviser | Richard H. Cornelisse | Pulse | LinkedIn

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