Three Benefits of a Single Source of Truth With Longview Tax
Tax teams of multinational enterprises (MNEs) face increasing challenges to manage business and market risks effectively while reporting, as well as the shift of resources within companies.
A recent survey by Ernst & Young sees compliance as a “do more with less” situation, with 95% of companies reallocating a portion of their tax and finance budget away from routine activities like tax compliance to strategic activities like tax policy, planning, and controversy.
Alongside this belt tightening are new compliance demands for tax teams. These include controlled foreign company reporting under EU Anti-Tax Avoidance Directives, global intangible low-taxed income in the US, and the Base Erosion and Profit Shifting (BEPS) project by the Organisation for Economic Co-operation and Development (OECD). Tax teams that will come out on top of this are those that can adapt quickly and maintain agility in reporting.
What will help you succeed during these testing times is relying on a single source of truth. By doing so, you’ll be able to optimize your tax technology and processes so you can both spot data insights and mitigate risk.
Here are three ways using a single source of truth will help you with the coming crunch of tax compliance.
Using a Single Source of Truth With a Streamlined and Centralized System
International tax agreements are slowly moving forward and will affect organizations with a multinational footprint. The OECD’s two pillar approach includes new taxing rights for certain market jurisdictions along with a global minimum tax aimed at income subject to a rate lower than 15 percent.
In reaction to these rules, some jurisdictions, including those in the US, have proposed a qualified domestic minimum tax, which would allow the host country to step in and apply a minimum tax to its residents, precluding other jurisdictions from capturing the minimum tax under the income inclusion rule (IIR) or the undertaxed payments rule (UTPR). In short, international taxes now come with a plethora of considerations that weren’t there before.
With the current and proposed changes, having software that can optimize your tax processes through a streamlined and centralized system is essential for generating reporting and insights that you can trust. Without a connection to source data, the risk of errors in your tax reporting skyrockets, bringing with it countless hours of double-checking the numbers.
With Longview Tax, you’ll be able to compare tax reporting across jurisdictions and business units by using a single source of truth. Doing so makes it much easier to identify and understand your main rate drivers. This timely and comparative reporting is exactly what you need to see your group’s effective tax rate (ETR) much earlier on and act if needed. And you’ll be able to complete provisioning faster because data is presented in real-time, without needing to wait on data consolidation or processing.
BEPS Pillar Two: The Data Challenge and Approach to Tax Transformation
Download NowData Automation Means Confidence in Your Data
In traditional tax groups, copying and pasting and linking datasets from different sources into multiple spreadsheets can take your time. Many tasks require somebody at a keyboard—something that was even more difficult to accomplish with a shifting workforces and remote offices of the post-pandemic world.
An Experian survey found that 95% of businesses have seen poor quality data undermine their performance. Depending on the size of the organization and the scope of the error, a single mistake can, unfortunately, result in hefty financial losses.
To avoid continuous disruption from errors frequently driven by accelerated data insights, look for a tax provisioning solution that enables you to automate repetitive tasks. You’ll have fewer errors in your tax data, and your team will be freed once again to think about the bigger picture. By using Longview taxes single source of truth, you’ll be able reduce the time you spend on number crunching.
Focus on Future Numbers and Forecasting
Nobody knows what the future holds. That being the case, it is important that you can account for multiple scenarios.
With the right solution in place, your tax team will be able to model multiple what-if scenarios and use the results to predict what the future might look like if the organization were to do this or that instead. By running multiple scenarios based on certain inputs and comparing the results of said scenarios, your team can figure out the best path forward and make smart tax decisions.
To achieve this, you’ll want a tax solution like Longview Tax to support forecasting the tax scenarios you’ll potentially face down the line—as well as the ability to rapidly reforecast said scenarios as needed when new data comes in.
These changing insights demand reliable and timely numbers. Longview Tax will let you have your data when you need it. Knowing that this data is coming from the original source can put you at ease that there are no data errors. This means when decision makers ask for data at the drop of hat, you’ll be able to provide allowing you to plan and pivot.
When you face tougher tax requirements and the need for deeper tax insight with Longview Tax, you be able to easily meet the needs of the growing complexities of your tax requirements.
To learn more about how Longview Tax can help you manage your tax processes, ask for a free demo.
The Role of Technology in Adopting BEPS 2.0
Download Now: