In the ever-evolving landscape of global tax compliance, businesses operating internationally face increasing demands from tax authorities. The shift towards real-time data reporting, driven by technological developments and the need for greater transparency, has placed significant burden on companies to adapt their financial processes.
Big Data Meets Big Brother: The Rise of E-Invoicing Mandates
International businesses have had to adjust to various e-invoicing and e-reporting mandates across multiple jurisdictions. From countries requiring e-invoice clearance, such as Chile, Mexico, and Brazil, to those mandating real-time reporting of invoice data like Spain and Hungary, the landscape is diverse and complex. The trend is driven by the requirement for real-time data disclosure to public authorities, in a bid to enhance transparency and reduce tax gaps.
In a recent UKISUG / Sovos webinar "Big Data Meets Big Brother," Filippa Jörnstedt, VP of Regulatory Analysis & Design at Sovos, explored the motivations behind these regulatory changes. She highlighted that while the approaches vary, the common thread is the demand for accurate and timely data submission. Businesses must prepare for this shift by ensuring their SAP data is compatible with various formats and connectivity models required by different tax authorities.
Successful S/4HANA Migrations: Integrating ERP Transformation and Tax Compliance
According to a recent study in The CFO, 40% of CFOs globally do not trust the accuracy of their financial data. This is primarily due to challenges in accessing and analyzing real-time information. SAP S/4HANA migration projects present an opportunity to address these issues while aligning ERP transformation with tax compliance obligations.
Another webinar titled "Successful S/4HANA Migrations," saw Marco van der Veer, Senior Tax Technology Manager at Sovos, discuss the convergence of ERP transformation and tax compliance. The global tax landscape is increasingly focused on data visibility, necessitating an 'always on' compliance approach.
To ensure future success, businesses must recognize the synergy between ERP transformation and tax compliance and the opportunity it presents. By addressing these concurrently, it is possible to mitigate risk and achieve transformative results, ensuring compliance and uncovering valuable insights that can be used to grow the business.
Spotlight on Analytics: The Importance of Data Accuracy in Tax Compliance
Governments are increasingly embedding their controls into companies' processes, necessitating more granular and timely data submission. This trend has led to a rise in audits, with tax authorities leveraging their comprehensive view of company data to conduct real-time assessments.
In the "Spotlight on Analytics" webinar, Jorge Ribeiro, Senior Product Manager at Sovos, examines how businesses can defend against audits and ensure data accuracy, and also emphasizes the importance of having a single source of truth for all business data to prevent inconsistencies.
By maintaining a single source of truth and ensuring data accuracy, businesses can navigate the complexities of modern tax compliance, reduce audit risks, and make informed strategic decisions.
The Case for a Global Approach to Compliance
In today's global economy, compliance with local laws and mandates is a fundamental requirement for business operations. The increasing complexity of regulatory obligations, driven by over 14,000 monthly regulatory changes across more than 19,000 taxing jurisdictions, has elevated compliance to a strategic business concern.
A global approach to compliance offers numerous benefits, including:
The final webinar in this series, “E-invoicing, Periodic Reporting and Analytics” with Andrew Hocking, VP Tax Technology at Sovos, delves deeper into key topics surrounding the convergence of tax compliance requirements and what this means for businesses, covering topics including the shift in compliance thinking from ERP to ecosystem and the importance of data harmonization across invoicing and reporting.
In Conclusion
The rapidly changing landscape of global tax compliance requires businesses to adapt their processes and leverage technology to meet regulatory demands. By understanding the motivations behind e-invoicing mandates, integrating ERP transformation with tax compliance, ensuring data accuracy, and adopting a global approach to compliance, companies can navigate these challenges effectively.
As tax authorities continue to tighten controls and demand real-time data, businesses must be proactive in their compliance strategies to thrive in this new era of transparency and accountability. Having a comprehensive solution in place to help manage compliance obligations seamlessly and staying ahead of the regulatory curve has become mission critical for businesses.
Learn more about a global approach to tax compliance here.
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