How to successfully integrate internal functions with mobility

Transcription

1 How to successfully integrate internal functions with mobility

2 Disclaimer EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. This presentation is 2015 EYGM Limited. All Rights Reserved. No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or distribution of this form or any of the material herein is prohibited and is in violation of US and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party. Views expressed in this presentation are those of the speakers and do not necessarily represent the views of Ernst & Young LLP. This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does not provide tax advice to any taxpayer because it does not take into account any specific taxpayer s facts and circumstances. These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice. Page 2

3 Your presenters Jackie P. Taylor Executive Director People Advisory Services Ernst & Young LLP Katrin Razzano Global Mobility & Immigration Head Capgemini Financial Services Page 3

4 Objectives of today s session What functions are global mobility dependent on to carry out its mission? What functions are dependent on global mobility to carry out their mission? Who are the stakeholders? What are the typical exchanges and deliverables? What are the risk and pitfalls when functions work in silos? Page 4

5 How to successfully integrate internal functions with mobility Storefront and the Backoffice Storefront Perspective of nonglobal mobility functions Backoffice Where the services delivery happen Organizational goals are common: Move the right talent to the right place at the right time Compliance Cost-efficient operations Page 5

6 Who are the cross-functional partners? Global mobility Treasury, Finance and Accounting Payroll Corporate Tax Internal Audit Human Resources (HR) and Legal Information Technology Page 6

7 Treasury, Finance and Accounting Page 7

8 Cross-functional partners Treasury, Finance and Accounting Global mobility depends on these functions to deliver: Payments such as automated clearing house, wires and checks to assignees, vendors, and authorities in various countries/currencies Expertise on currency controls and money transfer issues (business to business, business to individual, etc.) Policies, processes service level agreements (SLAs) to authorize these payments Policies and technical support for accruals and purchase orders (POs) Chart of accounts Treasury, Finance and Accounting depend on global mobility for: Cash flow forecasts, credits and debits, currency Accruals (deferred pay, taxes, vendors) Budget vs. actual analysis Audit trail, authorizations per their policies Page 8

9 Cross-functional partners Treasury, Finance and Accounting Example deliverables: Cash flow forecast the global mobility function needs to provide a cash flow forecast to the Treasury, Finance and Accounting; it is an example of a deliverable to the cross-functional partner/stakeholder to ensure they can be compliant with their internal policies and requirements Credit cash flow, typically tax refunds and tax equalization settlement (TEQ) repayments Accrual reports are monthly and are typically separate for incurred vendor expenses and taxes Risk and pitfalls: Payments made late incur interest, penalties, late fees and notices Payments held up for currency control Attention from internal and/or external audit Wreck internal goals for accrual accuracy and cash flow margins Page 9

10 Payroll Page 10

11 Cross-functional partner Payroll Global mobility depends on this function to deliver: Local, split and shadow payrolls Vehicle to remit tax and social security Vehicle to collect and settle hypo taxes Process for initiating payments and deductions Payroll codes that enable required reporting and mapping Payroll codes that enable required net payment result Global payroll calendar Payroll depends on global mobility for: Audit trail (authorizations and policy) Accurate reporting (inclusion in compensation) Documentation (letter of assignment (LoA), certificate of coverage (CoC), A1s, Form W-4, Form 673) Page 11

12 Cross-functional partner Payroll Example deliverables: Access to forms and CoC (shared folder, access to global mobility system) List of all payables and deductions with mapping instructions (reportable, taxable, non-taxable, home/host tax items, current/prior year tax items, etc.) Risk and pitfalls: IRS/state, foreign tax authority audit Attention from internal/external audit Overpayments and underpayments Inefficient reporting creating time-consuming reconciliations Missed payroll deadlines/cut-offs resulting in off-cycle payroll runs Reissue of year-end statements (W-2Cs), wreck internal goals and policies Page 12

13 Corporate Tax Page 13

14 Cross-functional partner Corporate Tax Global mobility depends on this function to deliver: Clear policy and guideline on the company s positions for permanent establishment and transfer pricing, which is specifically important for service industry Advice on specific cases as they arise Advice on corporate withholding taxes on cross-border intercompany charges Corporate tax depends on global mobility for: Being the first line of defense for permanent establishment (PE) and transfer pricing (TP) issues Documentation that uphold and substantiate the PE positions taken Timely head count (HC) transfers for costs to record on the right entities books Correct state-to-state head count reporting for corporate state income tax purposes Page 14

15 Cross-functional partners Corporate Tax Example deliverables: Continuously update corporate tax on the pipeline of assignees and transactions to enable corporate tax to give advice/limitations For PE purposes, keep and share day trackers for assignees Letters of assignment that explicitly substantiate PE positions Ensure timely implementation of shadow payrolls, etc. Ensure intercompany agreements (ICAs) reflect the TP positions and agreements, if any Risk and pitfalls: Assignees creating PEs around the globe TP audits and assessments Erroneous corporate income allocations to states Page 15

16 Internal Audit Page 16

17 Cross-functional partner Internal Audit Global mobility depends on this function to deliver: Independent review of compliance with laws and regulations, as well as internal policies Advice on areas of opportunity for improvements Validation of current organization, processes and execution, as well as sufficient resources to carry out mission in compliance Internal Audit depends on global mobility for: Providing requested documentation of policies, processes descriptions, standard operating procedures (SOPs), etc. Providing substantiation of the above Page 17

18 Cross-functional partner Internal Audit Example deliverables: Complete assignee documentation, signed authorizations, signed letters of assignment, signed exception approvals, copies of TEQ summaries, collection requests, paid and received checks, etc. Risk and pitfalls: Language/terminology differences; before starting the process educate each other on definitions and terminology Internal Audit issues may cause the leadership and stakeholders to lose confidence in the function Page 18

19 HR and Legal Page 19

20 Cross-functional partners HR and Legal Global mobility depends on these functions to deliver: Support with immigration documentations Support with on and off boarding Advice on balancing compensation and benefits policies versus local statutory laws and regulations Advice in disputes Timely notice on terminations HR and Legal depend on global mobility for: Visibility to employee movement Tax implications of employee assignments and transfers Succession planning and talent optimization strategy Ensure compliance with local requirements and training Performance management stakeholder involvement Page 20

21 Cross-functional partner HR and Legal Example deliverables: Performance management process, legal compliance training, collaborative process flows user experience (Ux), handling of split payments (compensation) and compensation planning Risk and pitfalls: Assignees claiming local statutory benefits not budgeted for by the company Severance payments being taxable in the host country Local statutory notice periods and severance payments becoming applicable Relocation costs becoming taxable Internal Audit issues may cause the leadership and stakeholders to lose confidence in the function Less than optimal employee experience Inconsistent HR practices Legal compliance/training gaps Page 21

22 Information Technology Page 22

23 Cross-functional partner Information Technology Global mobility depends on this function to deliver: Interface capabilities and linkage to core enterprise resource planning (ERP) data Review and assessment of technology capabilities/vendors Information Technology depends on global mobility for: Geographical representation of employees Visibility into employee movement and assignments Compliance and restrictions Page 23

24 Cross-functional partner Information Technology Example deliverables: New system selection and implementation, EU data privacy assessment, stakeholder role in projects Risk and pitfalls: Unreliable or no access to key global systems Violation of data privacy laws Works council approval issues Multiple technologies leverages with no integration Increase cost for technologies Page 24

25 Summary Successful integration across functions helps to avoid risk. Technology is a key component to communication across functions and to ensuring access to global information in a timely manner. Global mobility should play a key role in IT purchase decisions and an organization s business process reengineering projects. Employee experience is directly impacted when global mobility teams are not included as a stakeholder. Page 25

26 Any questions? Page 26