Presenters
Christiaan Van Der Valk
VP Strategy
Sovos
Sarah Fane
Head of Research
sharedserviceslink
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Surviving CTCs
Introductions
Trends
Readiness assessment
1
2
3
Agenda
1990 202020102000
Dig
ital
Inn
ova
tio
n
Audit Capability
Deficit
CTC disruption
Good Practice Implementation
Private Sector
Tax Administrations
The best of both worlds is possible
What’s going on?2
An epic battle is brewing in the cloud
I want borders, taxes, control…
Give me global markets, efficiencies
Web Forms
Mexico, Brazil, Italy, Turkey, Korea
Paradigm ShiftDigital Tax Reporting
TraditionalTax Form Filing
Paper Forms
© 2017 Sovos Compliance, LLC.
Impact on Systems
Imp
act
on
Bu
sin
ess
Pro
cess
es
TransformativeE-Invoicing Compliance
Digital file transmission required Electronic invoice required
ChileFi
na
nci
al
Op
era
tio
na
l
Tax Process and Resource Impact Digital Ecosystem Impact
Optional ‘Post Audit’ E-invoicing
Residual (Digital) Reporting
Poland SAF-T
‘Clearance’ e-invoicing and E-Assessment
UK MTD
Hungary
Spain SII
ERP Impact
Continuous Transaction Controls
Continuous Transaction Controls – basics
Emerging CTC flavours
CLEARANCE
PUBLIC
PROCUREMENT
NATIONAL E-INVOICING
FRAMEWORK
CONTINUOUS
REPORTING
‘OWN THE
NETWORK’
Europe
Asia
SouthAmerica
North America
CTCs going East
Public procurement
objectives such as EU
regional integration have
driven PEPPOL as an
interoperability approach.
Semi-closed ‘business
networks’ and open
network approaches will
coexist for the coming 5-
10 years.
CTCs going East – Supply Chain impact?
supplier buyer
CTC
platform
Business transaction
Classic CTC model
supplier buyerCTC
platform
Emerging ‘own the network’ CTC model
(Turkey, Italy, Russia…plans in Saudi Arabia, Jordan)
BUSINESS IMPACT‘COMPLIANCE’ EVIDENCEATTITUDE
FINANCIAL IMPACTSUPPLY CHAIN
INTERRUPTIONSERRORS
TAX ADMINISTRATION AUDITS YOU
YOU ‘AUDIT’ THE TAX ADMINISTRATION
ACCOUNTABILITY
ADMINISTRATIVE FINES
FELONY -TAX EVASION
NONCOMPLIANCE
DECENTRALIZING OK
DECENTRALIZING RUINOUS
STRUCTURE
SOLUTION IMPACT
FREQUENCYPERIODIC CONTINUOUS
MANUAL AUTOMATEDMETHOD
ERP CENTRICTRANSACTION
CENTRICSYSTEM
TAX DEPARTMENT IT DEPARTMENTORGANIZATIONAL DRIVER
MONOLYTHIC APPLICATION
FLEXIBLE INTEGRATION
SOLUTION
© 2017 Sovos Compliance, LLC
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Traditional TAX FORMFILING
Paradigm Shift DIGITAL TAXREPORTING
TransformativeE-INVOICING COMPLIANCE
Highlights EU & Asia CTC developments
INDIA
GREECE
HUNGARY
FRANCE
TURKEY
ITALY
SPAIN
HUNGARY
E-Invoice GIB (TRA) exclusive transfer hub of B2B tax invoices
E-Ledger
E-Delivery Note
E-Archive (B2C reporting)
TURKEY
From 1 April 2020, starting with largest companiesReal-time clearance granted via Invoice Registration Number (IRP)
No impact (yet) on existing invoiceprocesses except adding IRN/QR CodeExisting optional (‘post audit’) electronic invoicing unchanged
INDIA
Has mandated real-time reporting (no invoice clearance) for suppliers since 2018From July 2020 all invoices affected
Expected in coming years to repurpose existing reporting platform to become invoice exchangeplatform
HUNGARY
Current implementation deadline 1 April 2020
Submission of invoice data via reports or real-time
Buyer must complete with accounting data not received from suppliers
Online myDATA books must be kept consistent with taxpayer’s
GREECE
Will mandate e-invoicing with real-time controls starting 2023
Considering different paths
Like Italy, existing mandatory B2G infrastructure will play a role
Final model may be inspired by Italy, Turkey and PEPPOL
FRANCE
ReadinessAssessmentFramework
2
CONTINUOUS
TRANSACTION
CONTROLS
E-Invoicing
Periodic
Reporting
POST
AUDIT
Indiaunique
referenceinvoicing
Post Audit e-Invoicing
Clearance E-Invoicing
(LATAM, Italy,
Turkey)
HungaryReal-Time Reporting
Turkey E-Ledger
Mexico E-Accounting
Norway, Poland,
France and other SAF-TUK MTD
How can you survive the CTC chaos?
Purchasing Financial Core Selling
Tax Today: Manual & Local Point Solutions
Control challenges created by legacycompliance approaches are compounded by business & IT trends:
• Cloud-enabled, faster ERP versions e.g. SAP S/4
• Move legacy tax customizations, add-ons and configurations to new ERP?
• Adoption of procurement and order-to-cash cloud platforms
• Transactional tax compliance in hands of third party vendor(s)
• Establishment of Shared Service Centres
• Need ability to centralize & automateMultiple software and service vendors with varying contracts, SLAs,
insurance, liability, certification, security & privacy
REGULATORY CHANGE
ACCELERATES
Adopt a modern,
global strategy
Support digital
transformation
Pressure to use disparate
local solutions
Reverse digital
transformation
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
1
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Brownfield
Move across all the configurations and
customizations aimed at decentralized ‘compliance’
in the pre-CTC world:
• Substandard quality & controls
• No ability to evolve to transactional compliance
Greenfield
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
Local andFunctional
vendors
2
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Choose the software (SaaS)
vendors that best support
your business
Ensure consistency of
compliance approach,
auditability and control
For clearance e-invoicing and
other 100% transactional
CTCs, companies must often
rely on external AP and AR
vendors meeting and
upholding requirements.
How do you know your
selected procurement, EDI,
order-to-cash, AP
automation, T&E, CCM, e-
commerce marketplace,
EIPP etc vendors can
maintain compliance over
time?
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
Local andFunctional
vendors
3
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Diverse AP Systems & processes
Supplier onboarding, ordermanagement, catalogue,
spend management, interop
Business Networks
AP automation
T&E
Middleware
EDI/IB
EIN/P2P/Supplier portal
Clearance, B2B2G
SUPPLIER(S)
Scan OCR
Map
Invoice approvalworkflow
Two orthree-waymatching
Errormgmnt
Pay
Dynamicdiscouning
etc
Global XML
Structured mandatory XML schema
Post Audit EDI
Intra-group
E-Receipts/tickets
Paper/PDF B2C receipts
PDF PA B2B
Paper B2B
Book
ORDER, GRN / DELIVERY NOTE
BUYER
Post-Audit and Common AP Indirect Tax Requirement Types
20+ indirect tax requirement categories
each different per country
Clearance Country AP Indirect Tax Requirement Types
BUYER
Supplier onboarding, ordermanagement, catalogue,
spend management, interop
Business Networks
AP automation
T&E
Middleware
EDI/IB
EIN/P2P/Supplier portal
Clearance, B2B2G
SUPPLIER(S)
Scan OCR
Map
Invoice approvalworkflow
Two orthree-waymatching
Errormgmnt
Pay
Dynamicdiscouning
etc
Post-Audit and Common AP Indirect Tax Requirement Types Clearance Country AP Indirect Tax Requirement Types
Global XML
Structured mandatory XML schema
Post Audit EDI
Intra-group
E-Receipts/tickets
Paper/PDF B2C receipts
PDF PA B2B
Paper B2B
Book
ORDER, GRN / DELIVERY NOTE
BUYER
Supplier onboarding, ordermanagement, catalogue,
spend management, interop
Business Networks
AP automation
T&E
Middleware
EDI/IB
EIN/P2P/Supplier portal
Clearance, B2B2G
SUPPLIER(S)
Scan OCR
Map
Invoice approvalworkflow
Two orthree-waymatching
Errormgmnt
Pay
Dynamicdiscouning
etc
Post-Audit and Common AP Indirect Tax Requirement Types Clearance Country AP Indirect Tax Requirement Types
Global XML
Structured mandatory XML schema
Post Audit EDI
Intra-group
E-Receipts/tickets
Paper/PDF B2C receipts
PDF PA B2B
Paper B2B
Book
ORDER, GRN / DELIVERY NOTE
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
4
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Avoid disruption of
compliance processes that
are imperfect but get the job
done
Secure cost-effective
readiness for diverse CTCs
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
DirectSuppliers
IndirectSuppliers
5 5
SmallCustomers
LargeCustomers
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
6
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Your intercompany invoices
are fine where they are –
you don’t want to mess with
potential critical BEPS
evidence
Ready your systems and
processes for a world of
CTCs
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
7DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Archiving: from must-do to must-have
Ability to reconcile & defend becomes business-critical
Compliance Survival
Maintain flexibility to store
tax originals in disparate
solutions
Ensure consistency of
compliance approach,
auditability and control
TAX ADMINISRATIONS
ERP & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
8
DirectSuppliers
IndirectSuppliers
SmallCustomers
LargeCustomers
Tax determination:
from hygiene factor to operational necessity
Good to have Survival
Ensure tax decisions are
right from the source, not ex
post
Ensure consistency of
approach across disparate
environments and trading
partners
TAX ADMINISRATIONS
Erp & otherback-end systems
Own ARtransactionalsystems
Buyers’ AP transactionalsystems
Own APtransactionalsystems
Suppliers’ AR transactionalsystems
Local andFunctional
vendors
DirectSuppliers
Local andFunctional
vendors
IndirectSuppliers
1
6
8
7
3
5 5
SmallCustomers
LargeCustomers
2
4
Questions?
Next From sharedserviceslink
www.sharespace.digital
January 23rdJanuary 16th January 30th
Next From sharedserviceslink
www.sharespace.digital
January 23rdJanuary 16th January 30th
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