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Digital tax rolling full speed

The shift to digital tax is a game changer

To date, there are more countries that have implemented some form of digital tax reporting or collection than those still following the old manual submission method.  The number of countries taking the digital path increases on a yearly basis.  It seems inevitable that tax authorities will increase requests of electronic filings and develop robust auditing techniques.

The digitalisation of taxation is part of a bigger objective—the shift to sharing more sensitive information with tax authorities, accelerated by the OECD’s Base Erosion and Profit Shifting initiative (BEPS).

Having digital data at hand provides the tax office with a powerful means of leveraging on gaps between formal business models and the provided source data.  Examples of reconciling gaps observed with many companies include, but are not limited to VAT ledgers not matching the tax returns, data errors originating from ERP configuration, or segmented Profit & Loss statement not being supported by TP documentation.

It is expected that tax authorities will become increasingly better and faster in executing their tax audits because of technological innovations.  Tax audit assessments will increase due to data mismatch rather than legal misinterpretation.

Several companies wait until audits and disputes are underway before validating ERP data and developing digital documentation.  The requested information is often not readily available, which hinders conducting the proper data verification before submission deadlines.  Pre-emptive measures now can help companies avoid surprises and better manage resources. 

Today’s technology and data analytics capabilities provide a variety of options to improve reporting and documentation, enable greater control and access to information, and harness creative ways to make sense of large volumes of information. 

Hence, many clients opt to leverage on the Belgian TMC team technology capabilities, which assists in risk detection, opportunity identification, projections and scenario planning, and overall business support.

The team is readily available to offer the following services to clients:

  • Pre-audit analysis, including elevated e-audit (SAF-t) file contemplation with automated checks and reviews to VAT/CIT returns and local Financial Statements;
  • Annual due diligence of the main ERP data, including customer/vendor master data, tax hierarchies or accounting from tax standpoint;
  • Automation of CIT computation;
  • Automation of tax provisioning and effective tax rates;
  • Developing analytical tax dashboard with trend analysis;
  • Bringing automated controls into ERP system;
  • Assisting in developing TP driven financials.

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