32 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s The impact of BEPS 2.0 Into this already complex landscape arrives the Base Erosion Profit Shifting (BEPS) 2.0 directive, a key cornerstone of the last G7 summit, which is designed to harmonise corporation tax on a global level. Aimed at limiting the impact that businesses can create by shifting profits offshore, everyone will effectively pay at a minimum rate of 15% to companies, regardless of jurisdiction, via the implementation of a so-called “top-up tax”. The rules will apply to around 500 UKheadquartered businesses. Let’s say, for example, you have 50% of your business in the UK and the rest spread across 20 EU countries. You’re not likely to have a dedicated tax function in each jurisdiction; you’re more likely to outsource it to local experts. However, for BEPS it is vital to calculate it all and feed it back to HQ. The real challenge lies in the data you need to gather, especially if you operate across borders – and you might not even be collecting or reporting on it yet. Deferred tax is probably the main area that will be required for BEPS reporting, but in many instances won’t be housed within your ERP system or other dedicated software. For those using Excel, it can be a long, manual process. Instead of relying on complex spreadsheets, which are prone to human error, BEPS may push you to create a single, trusted source of all data. This will ensure you can draw on all the necessary components for any new reporting requirements. Centralising and streamlining data But, how do we centralise our data in an efficient way? Many companies rely on their ERP systems as a natural first choice. The problem here is that lots of these companies will have complex legacy systems that date back years, making it a real pain to collate data. SAP4HANA and Oracle Fusion are good modern versions of ERP but even they won’t necessarily gather everything you need without a significant spend to customise them. It is also important to bear in mind that corporates typically consolidate returns at a group “Everyone will effectively pay at a minimum rate of 15% to companies, regardless of jurisdiction, via the implementation of a so-called top-up tax.”
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