Kim Hau, Senior Proposition Manager for ONESOURCE Indirect Tax, Thomson Reuters explains what emerging technologies actually mean and how will they help today’s organisations to interact with tax regimes around the world.

Tax regimes, legislation, and government systems are evolving. The shift towards real-time interaction will not slow down anytime soon and this is impacting the tax departments of businesses around the world. As emerging trends change, the way government systems are deployed and the technology they use will impact upon tax legislations around the world. Multinational organisations need to keep pace and embrace technology while ensuring they still comply at the speed of business.

If businesses aren’t familiar with the acronyms RPA, AI or even heard the term Blockchain then they need to learn about them, fast. They are no longer phrases from a futuristic text but actual developments in today’s technology and businesses.

1. Robotic Process Automation (RPA) is, essentially, software robots that mimic human tasks across applications in a non-invasive way. If a process can be documented for someone else to follow especially if it’s a potentially error-prone process, high-risk or manually intensive, or done so frequently that it’s just not a good use of time, then it’s a good fit for RPA. Companies will find that some of their tax processes will fit this bill and free up resource to work on more important tasks.

2. Machine Learning and Artificial Intelligence (ML/AI) are two concepts often related and used interchangeably. Machine learning generally describes algorithms used by machines to teach themselves. Artificial Intelligence is used more broadly to describe the ways in which machines can perform tasks intelligently. Simply put it’s about taking a big population of data, learning patterns about that data, and then revising and training algorithms automatically to get better over time. Machine learning doesn’t have to be as sophisticated as self-driving cars. Think about how Amazon, Google, and Facebook use machine learning algorithms to improve recommendations, suggestions, and news feeds. Some of those capabilities are being applied to finance and tax today, particularly in areas where accurately categorising, grouping, or classifying large volumes of data frequently is part of the process. Ingesting data from a dozen different ERP systems and getting it lined up for tax compliance and reporting is an obvious place where it can make a difference to business.

3. Blockchain has been integrating into the business world far sooner than many predicted and as such there is a growing belief that it will radically change the way in which value is exchanged and how items are tracked and traded. Banking, insurance, voting, land registries, real estate, and stock trading are all examples of areas and industries where Blockchain is likely to impact.

While much of the publicity around Bitcoin is related to hackers and the cryptocurrency bubble, much of the real Blockchain activity seen so far is centered on the distributed ledger itself and the ways in which it’s going to disrupt middle men, or intermediaries, by connecting the transacting parties directly. From a positive point of view it is believed that Blockchain will speed up transactions and reduce cost while reducing fraud and increasing transparency.

At its core, Blockchain’s a distributed ledger that records transactions — and many of those transactions will be taxable events which is why it matters to tax. The details around Blockchain are complicated but suffice to say there’s a reason so many governments and industries are actively experimenting with Blockchain projects.

From a tax point of view, it’s likely that Blockchain will impact the tax department via governments and tax authorities pursuing digital strategies around e-government and that technology used by tax to stay compliant will have to adapt to this evolution.

With these developments in mind multinational companies should focus on incorporating technology trends that will assist in managing tax requirements rather than just putting out fires when the next major tax initiative comes along.

HMRC’s Making Tax Digital (MTD) is the perfect opportunity for businesses to be proactive and developing processes that are nimble enough to adjust to change. Tax should focus on what it can control, like the preparedness of systems and the scalability of processes, in order to adapt to the next change. Today, keeping pace with specific rate changes and regulatory modifications is largely a function of tax technology platforms. With HMRC’s October deadline there’s never been a more obvious time to implement solutions that enable and empower tax departments.

Louise Green is the Chief Marketing Officer at Bureau van Dijk, a Moody's Analytics company. It is committed to empowering customers to make better, faster decisions, by providing the most reliable private company information in the market. Below, Louise tells us about Bureau van Dijk’s Corporate and Financial Solutions and the importance of comparability and efficiency when it comes to data and company information.

Tell us about the key corporate and financial solutions that Bureau van Dijk offers

We aim to make our customers more successful by providing company information solutions that help improve efficiency, grow revenue and mitigate risk.

How much do you know about who you are doing business with?

Whether it’s the financial strength and longevity of your suppliers, your clients’ ability to pay, complying with regulations, protecting your reputation or understanding new and existing markets, more certainty is always welcome.

We capture a wide variety of data, then we treat, append and standardise it to make it richer, more powerful and easier to interrogate. In fact, we capture and treat data from more than 160 separate providers, and hundreds of our own sources, to create Orbis, the world’s most powerful comparable data resource on private companies.

Orbis has information on around 300 million companies in all countries. It’s the resource for company data.

The company reports are detailed and comparable, and comprise:

• 26 balance sheet items
• 26 profit and loss account items
• 32 standard ratios

Our customers, including financial institutions, corporates, governments and academia, use our products for a variety of purposes.

Compliance and reputation management

With comprehensive global coverage, the richest source of corporate structures and beneficial ownership data available, plus information on PEPs and Sanctions, we are the resource for compliance and onboarding.

Financial risk

Our standardised financials help to assess and benchmark companies globally. We offer financial strength metrics using a range of models and include a qualitative score when detailed financials are not available.

Tax and transfer pricing strategies

We combine our comprehensive company information with transfer pricing functionality, so customers can plan, set policies, manage risk and document compliance processes.

Customers can also fine-tune policies, create robust audit-defence analysis and prepare TP documentation. We’ve created a full document management system to help with BEPS and country-by-country reporting requirements that helps customers become more efficient.

Business growth and strategy

Research new markets and industries, understand the M&A landscape and foreign and direct investment.

Orbis includes information on:

• public and private company data – including banks and insurance companies
• associated news and independent research
• global M&A deals and rumours
• ESG reputational risk ratings and metrics
• original filed documents and document-ordering services

Data is getting bigger all the time, which makes extracting value from the numbers more difficult and time consuming. One of the ways that we increase efficiency is by making it simple to compare companies internationally.

Using our solutions, customers can interpret data quickly, and automate and centralise much of their research.

In what ways have Bureau van Dijk’s offering evolved over the years?

Bureau van Dijk has been an innovator in private company information since its beginning. We first delivered company information to clients on CD - then DVD-ROMs. This was a ground breaking way for companies to quickly research other companies. While we still offer on-premise solutions, our data and analysis resources today are accessible in the cloud, in third-party platforms and through integration into systems and workflows.

Our products are just as innovative today. For example, it’s not just that we offer the world’s most powerful comparable data resource on private companies, or the extensive corporate ownership structures included within it, it’s often how you can combine datasets in new and innovative ways to create better solutions for customers. For example:

• By combining our ownership data with our sanctioned-by-extension data, compliance with the EU and OFAC legislation becomes much easier.
• Orbis Intellectual Property links global patent data to companies and corporate groups in a way that’s never been done before
• Orbis CrossBorder Investment is the only solution that combines information on greenfield projects with M&A to understand globalisation, and delivers information on the companies behind the investments

Customers can blend our data with internal data to refresh and enrich CRMs and other internal databases. Our unique company identifiers and bespoke matching services help to create links between disparate datasets across organisations and create single views from data silos.

We recently updated the interface for Orbis and several other products to make them even easier to search for and visualise data with pivot analyses, heat maps, dynamic company structures and more. These and other changes were made based on interactive feedback from our customers. We bring data to life in new ways with reports and dashboards that give a clear, intuitive view into the information that matters most.

How important is it for businesses to trust a data specialist like Bureau van Dijk when it comes to data and company information?

At Bureau van Dijk, we’re in the business of certainty. It’s vital that companies know who they are dealing with. Before embarking on a major investment, a new third-party relationship or procurement decision, companies need to have confidence that the information they base their decisions on is accurate and comprehensive.

As businesses can be global and often complex, it's harder to get a clear view of all entities involved and who holds control. We make it easy to analyse management and ownership structures. Orbis includes extensive corporate structures so you can assess the complete group or take the financial stability of the parent into account.

Having a clear view of ownership also helps our users comply with sanctions lists, anti-money laundering legislation and to perform the other crucial due diligence checks that are intrinsic to global business.

What are Bureau van Dijk’s goals for the future?

Our mission has always been to provide the most reliable private company data on the market. We will continue to enrich and expand our private company information database. This means identifying and integrating new, reliable information sources and standardising data to make it more comparable and useful for our customers’ decision-making processes.

 Contact details:

To find out about our free trial scheme, please visit www.bvdinfo.com or email bvd@bvdinfo.com.

Telephone (London): +44 207549 5000

Following the Panama Papers leak of files from last year, earlier this month, the Paradise Papers leak once again threw light on the world elite’s hidden wealth. 3.4 million confidential documents relating to offshore investments were leaked to Suddeutsche Zeitung, the same German newspaper that took hold of the Panama Papers in April, 2016, which then shared them with the International Consortium of Investigative Journalists (ICIJ) and a network of more than 380 journalists. The files reveal that large corporations, heads of state, politicians, celebrities and High-Net-Worth individuals are investing huge amounts of money in offshore tax havens. Surprise, surprise. And whilst about 100 media outlets worldwide are pouring over the findings, that include the Queen’s private estate allegedly being invested in a Cayman Islands fund, as well as offshore dealings by Donald Trump’s cabinet members, advisers and donors, a lot of people have asked the question: “What exactly is the problem considering that tax avoidance is legal?”

Panama Papers vs. Paradise Papers

Of course, as with everything, opinions are divided with many ordinary people finding tax avoidance to be offensive and unfair, while others feel that it is a perfectly fine way to save some of their hard-earned money. However, does the muted response to the Paradise Papers scandal show that we don’t care as much anymore?

Following the leak’s predecessor, the Panama Papers, thousands of people gathered to protest, which immediately resulted in politicians stepping aside and losing their jobs. Iceland’s ex-Prime Minister, Sigmundur Davíð Gunnlaugsson, resigned amid widespread protests and outrage over allegations that his family had sheltered money offshore. In contrast, it seems like this time around, the public anger has been on a much smaller scale. Last year, US President Barack Obama called for international tax reform in the wake of the Panama Papers, whilst admitting that “The problem is that a lot of this stuff is legal, not illegal.” However, whilst some wealthy public figures suffered personally and governments and organizations have put out a handful of fixes in recent years, the system remains perfectly intact.

So, are we all silently waiting for that potential reform, or have we simply come to terms with the fact that tax avoidance is fine and the rich and powerful will continue dodging tax?

The morality of offshore tax havens

It is a fundamental principle of democracy that everyone obeys the law. The law applies to everyone. The law states that we have to pay taxes. Whilst in most cases, putting your money outside of your financial regulations is legal, many argue that dodging taxes is morally wrong. In addition, according to a  letter to world leaders from May 2016, more than 300 economists argue that: “The existence of tax havens does not add to overall global wealth or wellbeing; they serve no useful economic purpose.”

By sheltering trillions of dollars offshore ($10 trillion according to Boston Consulting Group), the world’s top end make their money untaxable, depriving governments of hundreds of billions of dollars of tax revenues each year. Niels Johannesen, an Economics professor at the University of Copenhagen discusses the consequences of this behaviour: “Either a lot of people pay more taxes [to compensate], or there’ll be less public goods - schools, hospitals, and so on.” He also adds: “Given that this offshore wealth is to a large extent owned by the very wealthiest… it is people who should be paying the highest taxes who are evading the most.”

Thus, not only do offshore tax havens not serve any economic purpose, but they’re also immoral and deprive economies of funds that could be used on improving public services. Some politicians are recognising the issue, such as the Leader of UK’s Labour Party Jeremy Corbyn, who promised that if his party wins the next General election, it would clamp down on tax havens and end loopholes. The Paradise Papers have once again highlighted the need for this to happen. Yet, the notion that the majority of those involved are ‘getting away’ with tax avoidance, paired with the seeming apathetic response from the public appear to be rather worrying.

Every NATO country contributes to the costs of running the Alliance. By far the biggest contribution comes from Allies’ taking part in NATO-led missions and operations. For example, one country might provide fighter jets, while another provides ships or troops. NATO Allies also pay directly to NATO to cover the costs of NATO staff and buildings, its Command Structure, and its jointly-owned equipment, like its AWACS aircraft.

In recent news Donald Trump praised Saudi Arabia for fighting extremism in the region and said he was the one to make North Atlantic Treaty Organisation (Nato) members spend more on defence.

In addition, cyber-attacks are becoming more common, sophisticated and damaging. Cyber defence is now a top priority for NATO. NATO now recognises cyberspace as an ‘operational domain’ – just like land, sea and air.  NATO helps Allies to boost their cyber defences by sharing information about threats, investing in education and training, and through exercises.  NATO also has cyber defence experts that can be sent to help Allies under attack.