Transforming Data Into Value Rotterdam October 28, 2015
Introduction Leon Kanters Partner KPMG Trade & Customs 1
Landscape Multinationals How many duties does my company pay on an annual basis? Do I know how many different brokers we use? How do I ensure that all third parties are correctly instructed (e.g. HS code)? What steps are taken to secure that dutiable elements (e.g. royalty payments developments costs) are incurred in the customs value? 2
Landscape Multinationals 60% 50% 40% 30% 20% 10% 0% 55% Supply Chain 25% 15% 5% Tax Legal Other The role evolves Broader responsibility Various stakeholders 3
Wish list Assurance about filing your customs declarations and tax returns Fact-based insight in level of compliance for multiple jurisdictions Detection of risks and opportunities in your compliance process for filing returns and declarations Full audit-trail: covering checks performed as well as findings Real time continuous monitoring for all entities and transactions centrally Insight into potential tax or duty savings, process improvement opportunities, system improvements Visibility of data leads to improved decision making and reduces down stream adverse impact on taxes or duties Provide valuable insights into the global supply chain Clear overview of tax information in reports and dashboards 4
Landscape Government Is customs an independent law enforcement agency? Is customs part of inland revenues? Is law enforcement primarily or completely based on physical inspections? Does customs perform administrative audits and if yes, are also joint audits performed with direct tax and or VAT/GST? Does customs use IT auditors? 5
Cooperation is key to success Customs Other agencies Trade Inland Revenues 6
Turning Data into Intelligence Data Processing Reports Client data Data Extraction Data Processing Monitoring Using standard ERP extraction programs, TIS is able to extract relevant tax data with minimal impact to the client IT team. Additional data from customs authorities and other trusted external sources is also imported to TIS. The client ERP data is securely stored in the Tax Intelligence Center. This is when the data starts to deliver value as it is combined with the additional external sources of data. The Tax Intelligence dashboards are populated and refreshed with the processed information in readiness for clients to access them. 7
Turning Data into Knowledge Indirect Tax Identify VAT that has been incorrectly expensed Detect VAT determination errors earlier and reduce the risk of penalties Trade & Customs Application of VAT on Import transactions Clear overview of customs information Validation of applied duty rates Supply Chain Insights Assurance Risks and opportunities Be proactively in control Enhance working capital Trade-offs between TP and Customs Application of correct VAT on inter-company transactions SKU-level insights to evaluate correctness of inter-company margins (gross & net) Fact-based insight in level of transfer pricing compliance for multiple jurisdictions Transfer Pricing 8
Turning Data into Value 9
Future Landscape Client ERP data and external data sources Tax Intelligence Solution Indirect Tax Trade & Customs Transfer Pricing VAT compliance/efficiency cockpit Customs compliance gaps Global transactions services and goods Purchasing VAT reclaim analysis Cost savings Gross/Net margin evaluation 10