Insights from the Thomson Reuters – Tax Technology Leadership Summit

“Having tax knowledge and experience within the team is no longer enough. Tax technology is now about about efficiency, reducing errors and freeing capacity to become more involved in different projects” – Georgia Richardson, Omnicom.

The 2nd Annual Tax Technology Leadership Summit, London, exposed this year how the challenges that increased regulation, and the demands of ever- digitising tax authorities, are actually creating opportunities for tax teams to drive efficiencies and greater corporate value.

Laurence Kiddle, Managing Director, Tax & Accounting Corporate Market, Europe, pointed to a change in the operating dynamic for tax and finance, through both the attitude of tax authorities and the availability of technology, “Tax is now data driven rather than report driven. With four day reporting of VAT in countries such as Spain, we are seeing a movement towards what will become a real time environment. What would have been seen as a massive overreach by tax authorities a few years ago, is now the direction of travel”, he explained.

The reaction, he continued, was to look for more holistic and robust technology that could provide a greater level of certainty and control over accuracy, speed and completeness: “Tax teams are now pursuing a platform- lead approach rather than point solutions and manual processes”.

This change in approach was reflected in the customer panel which included Richardson, and also Chris Hammett from PA Consulting who also highlighted the way in which different groups of internal stakeholders were influencing the patterns of adoption:

“Our IT department has been driving us to move from Excel to reduce the amount of errors, and have less versions of the same documents in circulation.

We’ve also seen new members of the team embrace and get excited by the technology, and this has helped bring the rest of us along”, Hammett commented.

2018 European Tax Technology Survey
Many of the customer panel comments were found to echo the key results from the 2018 European Tax Technology Survey, which explored in detail the experiences and views of over 300 European based tax teams.

Steven Smith, Director of Product Management & Commercial Strategy at Thomson Reuters, highlighted that the report demonstrated “Regulatory changes and managing compliance are steering the need for smart technology adoption. Specifically when we note that the two main priorities for those looking to invest in tax technology highlight security and jurisdictional coverage”.

Richardson agrees with this, but also sounded a note of pragmatism “The benefits appear in year two, as the data and processes bed in. However, having always up to date templates and policies for areas we cover has had a very positive impact on what we are able to achieve, and keeps us one step ahead”.

Smith also highlighted that “Increased scrutiny from a PR, and also GDPR perspective- is overlaying a desire to apply greater control and certainty”.

A point confirmed by Hammett, “Corporate responsibility plays an important role. Through technology we now have better control and we can sign all the tax returns around the world. We can apply confident, consistent policies”.

The ONESOURCE Platform
The digital tax platform developed by Thomson Reuters, ONESOURCE, has been developed to meet the broad range of challenges highlighted by the report, Smith continued. But equally it looks to and anticipates requirements, best practice, and the best use of future technologies:

“Machine learning to map data from data sources to jurisdictional formats will bring added significant efficiencies to processes like Country-by-Country reporting. By building out workflows to including audit trail from the outset, and integrating with e-signing and storing documents in a central location- the challenge of demonstrating consistency and transparency of intercompany agreements and BEPS can be reliably managed.”

With 89% of those surveyed asserting that they see tax technology as strategic to their success, a platform approach, such as ONESOURCE holds significant value in simplifying the range of solutions used, while flexing enough to meet the broad range of requirements across different types of businesses.

The Future of Tax Technology
Although much of the summit was focussed on the here and now, and the near future, there was an opportunity to glimpse more of what is to come.

“As ERP moves to a cloud only strategy it will push the acceptance of all corporate technologies further this way”, Irish McIntyre Vice President of Product Management, observed.

With information and systems housed securely online, in much of the same way HMRC is already doing, the opportunity for both tax authorities and businesses to take advantage of the data increases. For business, digital reporting highlights the opportunity to enable better strategic decision making, with realtime clearance models giving better than ever data on up to the minute commercial transactions.

However, from a tax authority side digitalisation and the desire to bring simplification often has the result of creating added complexity for tax teams.

Their interest in next generation technology such as blockchain – primarily because of its main traits being that it is incorruptible, seemingly perfect to Know Your Customer, and fully auditable – should provide the strongest clue, as to what might come next. The journey to a digital tax world is now very much about how to get there, not whether it is really worth the ride.