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

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: