A SMARTer way to do business

In December 2017, many companies with annual group revenues of more than €750 million had to provide information to tax authorities on their worldwide activities and profits for the first time. As new regulations came into force, this meant filing a report that covered every tax jurisdiction in which they operate.

Country-by-Country (CbC) reporting is part of a 15-point plan started in 2013 by the Organisation for Economic Co-operation and Development to modernise the international tax framework and prevent base erosion and profit shifting – particularly via gaps and mismatches between rules in different countries.

The legislation focuses on ensuring a consistent framework for tax purposes - taxing profits where value is generated for the business. It has been backed by G20 leaders, Finance Ministers and more than 100 countries and jurisdictions.

Tech for tax

Our Tax Management Consulting colleagues developed a new tool and service to make compliance with CbC requirements simpler. Built in the UK, but available globally, CDX SMART went live in October last year. It handled more than 160 client filings across 20 jurisdictions ahead of the 31 December deadline.

Clients can use the web-based portal to upload and visualise their data, giving them a better understanding of their global footprint. It also converts information into the complex XML format required by tax authorities.

CDX SMART followed an earlier solution, CDX, which helped companies understand their global profile. “We chose to build our own tech as, at the time, there were no clear solutions in the market that would benefit our clients,” explains Tom Picton-Turbervill, Associate Director.

“Now, for the first time, tax offices around the world will have information across a company’s global operations. The information will be shared with other jurisdictions, so it becomes easier to risk assess cases that should be considered for tax audits.”