Ever since BEPS Country-by-Country reporting (CbCr) arrived on the scene, we’ve learned one irrefutable truth: having the right data at the lowest level of detail is paramount. Whether it’s locating related/unrelated party revenue, segregating branch information rolled up into its parent, or identifying stateless entities, data points stored at the lowest level ensures accurate reporting with total transparency.
Making CbCr Data Work for You
By overcoming the data-related challenges below, filers improve both preparation and reporting.
- Gathering and compiling data
- Relying on Excel® to process data
- Reviewing and analyzing real-time data
1. Gathering and Compiling Data
Tax departments typically gather data from multiple sources, including trial balances and data collection packages from foreign controllers. Each source creates its own bottlenecks when gathering data for review. You can streamline data gathering and eliminate repopulating data over and over by using the same data set you consume for U.S. compliance.
When filers attempt to compile and validate unstructured data, it drains time and resources. By storing data in a central location, it’s easier to assemble and structure—and by automating data-import, it’s easier to validate. You can apply rules and assumptions to your data and retain audit trails back to the source. Plus, storing compliance and CbC data in one system reduces the risk of reconciling between financial systems and data coming in from international counterparts.
2. Processing Data in Excel
If you rely on Excel to process your data, you run the risk of:
- Formulas not functioning as expected
- Overlooking compliance book adjustments/reclasses needed for CbCr
- Missing accounts that should be included/excluded in the CbC report
- Difficulty tying back to compliance or 10K data
Moving the process out of Excel and using compliance data in your tax system eliminates the need to continuously review spreadsheets—and reduces time spent on reconciliation. Using the same data also ensures reconciliation with the 10K. Plus, having structured data at your fingertips and the flexibility to include or exclude accounts further simplifies CbC reporting.
3. Reviewing and Analyzing Real-time Data
Tax departments perform reviews of data by entity/CbCr jurisdiction and then push the information to Transfer Pricing, Finance, and/or Legal for their reviews. Details are important for each of these teams, but so are analytics that shed light on the bigger picture.
Reviewing analytics by country provides key information such as revenue per employee, related vs. unrelated party revenue, and income taxes paid per pre-tax income. Once there are multiple years of CbCr data in your tax system, analytics can be reviewed year over year, providing key comparative analytics and benchmarking. You can use what-if scenarios to analyze changing regulations and support business planning.
To analyze data in real-time, a direct connection to your information empowers you to create dashboards specific to your needs and based on your current data. This allows you to review at a very high level (getting reviewers out of the weeds) as well as a detailed level. It also furnishes different perspectives on the organization as a whole.
Consider the Benefits of CSC Corptax BEPS CbC
CSC Corptax® BEPS CbC allows filers to consume the same data they use to report their 1120 and 5471. It’s quick and easy to view CbCr data at an entity, jurisdictional, or global level—and to instantly access up-to-date data to create meaningful analytics.
Further, automating the process in a single tax system allows tax teams to:
- Easily document related party/unrelated revenue
- Ensure correct country segregation down to branch level
- Report stateless entities correctly
- Gather data points from international counterparts
To see a BEPs CbC software demo, give us a call at 800.966.1639 or drop us a line at info@corptax.com.