On August 19, 2023 at the Shanghai National Convention and Exhibition Center, KPMG Global Tax Compliance and Transformation Services Partner Yan Xiaoguang, Thomson Reuters Greater China Marketing Director Wu Li, UFIDA Senior Vice President Du Yu, UFIDA Germany General Manager Lin Nan, General Manager of Yonyou Network Tax Cloud Business Department Chen Fei, and many business leaders such as corporate executives, technical masters, experts, scholars, investors, and media witnessed the Yonyou Global Tax Management Solution for Multinational Enterprises (YonGTS1.0) of the official release.
In the process of accelerating globalization, multinational companies are facing multiple challenges in terms of global tax compliance. They not only need to comply with the tax system requirements of the country where the group headquarters is located, but are also regulated by the tax systems of overseas countries, international tax agreements, and international anti-tax avoidance rules. At the same time, multinational companies are also facing the pressure of digitalization. In the era of digital intelligence, domestic and foreign tax authorities have strengthened information exchange, improved the information construction of national tax authorities, and continuously increased the pressure on multinational companies in terms of tax compliance and transparency of tax information disclosure. Specifically include:
01
During the infrastructure construction period and start-up period , enterprises entering investment hot spots are faced with the dilemma of being unable to speak foreign languages, unfamiliar and complicated tax systems, unclear regulatory requirements, and insufficient personnel with international or overseas taxation knowledge reserves.
02
In the period of expansion and growth , enterprises are faced with the complex network of tax agreements and the different economic substance requirements of foreign governments, which bring pressure on the management of dividend withholding tax and the enjoyment of treaty benefits for overseas entities; and, under the global supply chain Frequent cross-border transactions and complex tax-related risks pose challenges to tax compliance for overseas entities.
03
In the mature stage , with the gradual advancement of BEPS2.0, non-trade projects such as cross-border payment of interest, royalties, and service fees are in a high-risk state; while the global investment structure continues to expand, taking into account the tax compliance and compliance of domestic and foreign investment entities Tax efficiency is extremely difficult.
In this context, multinational corporations are facing unprecedented tax compliance requirements and pressure from informatization. It is necessary for domestic group headquarters and overseas institutions to jointly build a digital and intelligent tax management platform that integrates industry, finance and taxation in order to effectively deal with it.
Based on the two global tax management goals of overseas tax compliance and headquarters tax control, UFIDA has built a global tax management solution framework:
01
In the tax-related data layer, after getting through the contract data, project information, sales information of the business system, invoice information, bank flow, and financial statement data of the financial system;
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Through the built-in tax rules, overseas entities will rely on the basic tax declaration, customs and trade management, and related party transaction management sections of the tax compliance management platform to complete basic tax compliance such as tax calculation, declaration and payment, and tax-related information submission. Task;
03
At the headquarters level, top-down tax control functions are realized through tax analysis, planning and risk systems.
At the level of foreign institutions in global tax management:
01
First of all , in the tax declaration management section, the transactions, flow, invoices, financial data, etc. of the business and financial systems will be connected to the tax management system through the data collection port. Withholding and remittance and other tax rules, realize functions such as automatic tax calculation of multiple tax types, one-click declaration, filing and uploading of tax data.
02
Secondly , in the customs compliance management section of cross-border transactions, data such as business and financial system flow, orders, export invoices, customs declarations, and declaration data such as value-added tax declarations and processing trade are connected to the customs compliance management through the data collection port. The regulatory management system, through the customs rules defined together with ecological partners, completes the compliance management of customs documents, distribution documents, declarations, export tax rebates and other items, and realizes automatic calculation, statistics, and one-click declaration of import and export tariffs and value-added tax , account book management, filing and uploading and other functions.
03
Finally , in the transfer pricing compliance management section of cross-border transactions, the transaction or project data of the business system, the income tax rate of the financial system, the financial statement data such as recoverable losses, and the manual maintenance of functional risk positioning, target profit rate and other data , connect to the transfer pricing compliance management system through the data collection port, and realize the type and amount of related party transactions, external payment items and amounts, gross profit margin, full cost mark-up rate and other indicators through the transfer pricing rules defined together with ecological partners Automatic statistics, and realize the generation of multi-dimensional statistical data and analysis reports according to functional risk positioning, related transaction type, actual tax rate, country or period.
At the top level of global tax management, the compliance data of taxation, customs and transfer pricing management of overseas institutions are aggregated and uploaded to the headquarters level:
First, the headquarters will build tax data, rules and knowledge reserves with the help of a digital intelligence platform : compile the overseas tax internal control system process manual, sort out the knowledge and case database of overseas tax systems and tax risk characteristics knowledge and case database, and customize standardized , Tax contribution statistics and profit margin analysis by business, tax burden cost analysis, overseas investment and income information statistics, tax forecast and budget management, and tax risk self-examination reports and other reports.
Then, the headquarters will realize the implementation and application of tax control through the digital intelligent platform . Specifically include:
Nest tax control points in business activities, and front-end tax risk and planning control points;
Generate tax management reports and tax risk self-examination reports on a monthly/quarterly basis, identify tax risk points and planning points related to business activities in a timely manner, and evaluate their risk levels and priorities;
Screen out risk points with higher risk levels and planning points with higher priority, and preliminarily push relevant countermeasures and cases for management decision-making reference.
Finally, the headquarters will realize the tracking and management of tax control effects through the digital intelligent platform.
For major risk events , after the management decides to choose reasonable countermeasures, the tax management and control system will track the statistical processing and processing results;
For major planning issues , the tax management and control system will locate possible optimization measures to form the tax impact calculation support required for management decision-making;
For new markets/new investments/new transactions/new business models , the tax control system will provide business-level tax impact analysis data support;
Finally, at the level of post-event management , statistics and displays are made on an annual basis for the Group's overseas tax risk response and tax planning benefits to facilitate planning of future tax matters.
In order to build such a global tax management platform for multinational enterprises, UFIDA has basic technical capabilities including: multilingual display and output, multi-time zone recording and task setting, multi-format display and output, and multi-currency conversion. At the same time, UFIDA also has in-depth business, financial and tax integration capabilities, supports multi-country accounting standard reports, multi-type tax laws and regulations analysis, multi-settlement payment method rule configuration, and global travel expense control management.
Utilizing these capabilities, UFIDA’s global tax management solutions for multinational enterprises can create value for enterprises including:
01
Establish an internally and externally coordinated and highly integrated tax compliance and control system : Relying on strong overseas data storage capabilities and financial system provider qualifications certified by overseas governments, use digital and intelligent technical means to open up the business taxation system processes, rules and data Various elements can build a highly integrated domestic and overseas tax compliance and control system for multinational companies.
02
Establish an efficient and precise tax compliance mechanism : By integrating tax laws, regulations, policies and law enforcement cases from multiple countries, digitize tax system knowledge and tax-related rules, empower overseas entities to automatically calculate tax, one-click declaration and automatic filing, and efficiently and accurately Achieve tax compliance.
03
Establish a tax control mechanism before, during and after the event : through a standardized tax analysis, planning and risk management system, establish an in-process monitoring and post-event analysis mechanism for routine tax compliance matters, and at the same time put the tax control points in front of the new tax management system. Conduct tax impact analysis on transactions/business models, provide decision support, and contribute to overseas business expansion
The follow-up YonGTS1.0 version will continue to iterate and upgrade, and continue to help multinational companies achieve efficient and accurate tax compliance and risk control overseas.
