Tax departments are having to “up their game” on data-intensive activities as their companies move to a more global business profile with increased regulatory and tax reporting requirements. With time and resource limitations, companies are looking to leverage what they have in their enterprise resource planing (ERP) systems to reduce risk and create value for the business.

SAP-enabled tax transformationStreamlining direct tax processes by leveraging SAP technology

Transforming insight into impact

KPMG LLP’s (KPMG) Tax Transformation and Technology (TTT) practice can help your company improve and automate direct tax processes using SAP tools that are likely already in use. We work with the tax function to help identify gaps and root causes of challenges that are embedded in current processes. We can help your tax team with developing practical recommendations to simplify tax processes using SAP technology solutions.

1 SAP-enabled tax transformation

Transforming data into valueCompanies often depend on their tax resources to transform enterprise data into usable information for tax reporting and planning. Increasingly, there is a need to utilize ERP systems to automate activities that have historically been manual:

– Necessity to analyze and present multiple levels of detail from transactional data to consolidated reports

– Growing need to proactively capture, benchmark, adjust, report, and plan intercompany transactions

– Demand to prepare and support complex sets of quarterly financial reports in an increasingly compressed time frame and high level of accuracy

– Requirement to capture multiple sets of data for calculations and reports required by taxing authorities around the world for periodic tax compliance and historic records for tax examinations and controversy

Given these considerable tax requirements, out-of-the-box ERP system capabilities tend to be limited and not sufficiently sophisticated to meet these needs.

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Our SAP Tax Solutions have tax function needs at top of mind.

MS Excel interface for reports and data & analytics

Archiving – configurable settings to

maintain history

Near real-time sourcing of data from SAP

sources

Self-service – configurable rules

engine that lets users set up and manage

Transparency – full audit trail to easily trace outputs to calculations

and source data

Richard Cimino Partner T: 336-433-7085 E: rcimino@kpmg.com

Representative features of our SAP Direct Tax Solutions:

How KPMG can help?

We have helped clients develop HANA and BPC/BW solutions to:

– Enhance data collection, validation, and reconciliation processes throughout the tax life cycle

– Improve data flows, communications, and handoffs between accounting and the tax departments

– Analyze the overall compliance and reporting processes, including risk identification and related controls

– Create tax-basis financial statements – Automate operational transfer pricing functions – Satisfy country-by-country requirements

Operational Transfer Pricing solution:

– Automates calculations of intercompany sales, intercompany services, cross-charges, and royalties

– Configurable rule engine that lets operational transfer pricing (OTP) users set up and manage processing rules to support desired transfer pricing methods

– Allocates corporate charges and FX impact – Transfer pricing scenario analysis based on price and

percentage variations – Records manual adjustments to the system-computed

transfer pricing JE’s

Book-to-Tax Automation Tool:

– Automates calculations of book reclassifications, book adjustments, permanent and temporary tax adjustments, etc.

– Deferred tax assets/liabilities analysis – Records voluntary adjustments – Reporting and analytics on tax-basis income statement,

tax-basis balance sheet, and tax-basis trial balance – Tax expense calculation and forecasting – Configurable rule engine that lets tax users set up

and manage computation of tax adjustments, book adjustments and cumulative temporary differences

Country by Country (CbyC) reporting tool:

– Automates sourcing and calculations of key CbyC reporting elements from within and outside the book of record systems

– Sets up work flows and document management to support local and master files creation

– Permits users to set up and manage rules to automate financial data reclasses, allocations, and regularly occurring adjustments