Tax Data Analytics and tax data blueprint

Tax data analytics

With the increasing volume of data and the digitalization of tax, data analytics will largely be used for tax audits and replace tax return compliance. These trends drive a need for better data quality. More comprehensive reporting will be required in order to establish a full tax position, and reconciliations will need to become more standardized.

Deloitte has been a pioneer in tax data analytics and has developed approaches adapted to specific taxes (VAT, customs and payroll etc.) and industries (FSI, municipality, real estate, retail…). Deloitte has a wide-range experience in running those projects for different purposes, from determining risks and opportunities to assessing an ERP setup and processes, from a report to be shared with the tax authorities to a recurring compliance dashboard.
Data analytics bring value to tax and in particular on the following elements:

•  Less time will be needed to analyze data due to strong results and more time for improvements and decision making;
• Continuous improvement of tax processes, risks and errors, and prepare for real-time reporting;
• Quantification of the risks & savings, both system and non-system related. This includes Master Data, Cash Flow, SSC, etc.;
• Dashboarding of business flows and tax management; 
• Support tax professionals in gaining traction internally because of its powerful visibility; 
• Present the findings in a report which can be shared by the Tax authorities.

There are multiple options available to dashboard data and perform analytics. This includes content and best practices which can be leveraged for instance into SAP S/4 HANA, SAP global tax management domain.

Tax data blueprint empowered by Deloitte enterprise tax platform

With the tax authorities moving towards e-audit and real-time reporting, the data is a key element and the data can no longer be handled for tax purposes just before the return submission:

• Tax Function needs to be more upstream to manage the initial entry;
• Tax Control needs to be both preventive and pro-active as well as automated before Tax Authorities analysis;
• Tax Authorities will have access to data either in ERP/Consolidation environment, or (more likely) in data lake environment;
• Data Analytics will replace most of tax return compliance; digital audits on data will become core;
• Reconciliation between taxes at transaction level and L2 data will become standard;
• Additional Reporting will remain required for full tax position.

Taxpayers need to be able to deliver data files and reports requested from various jurisdictions and covering a varied scope of taxes. The lack of harmonisation and short notice given to taxpayers to embed the changes, make it difficult for the tax and IT teams to take the appropriate actions. Deloitte assists in identifying the impact of the new legislations (e.g. SII in Spain, FEC in France, real-time reporting in Hungary, JPK and other reports in Poland) in term of data, processes and implementing the changes and issuance of reports.
Beyond the recurring reports to be communicated, the taxpayers must be ready to communicate data files for audit, in some cases on short notice.

Deloitte supports in identifying the necessary data, implementing the changes from a functional and technical perspective, performing tests and define an appropriate archiving format for the data.

Read more about Building the tax function of tomorrow.

More information?

More information on Tax Data Analytics and tax data blueprint empowered by Deloitte enterprise tax platform? Please contact Mathieu Janssen at +31882887478