New regulation for Tax Pillar 2 impacts the CFO Office

The new regulation for tax pillar two is soon coming into effect. How will you comply with these new regulations? What kind of Enterprise Performance Management platform easily meets CSRD objectives??

The new regulation for tax, BEPS Pillar 2 (OECD – global minimum tax) is coming into effect in various countries and is impacting companies with more than 750 million of revenue. In 2025 these companies need to report on 2024 figures. Next, a phased roll-out of the Corporate Sustainability Reporting Directive (CSRD) from the European Union is taking place. CRSD requires large companies and listed companies to publish regular reports on the social and environmental risks they face, and how their activities impact people and the environment. The CSRD will introduce a mandatory audit and assurance regime in relation to the data reported.?Some of the same financial and non-financial data used for corporate reporting and the annual report is a source for reporting according to both these new regulations as well. Automation to collect this data only once for these various reporting purposes with no reconciliation issues between them is a great benefit with a process workflow and audit trail in the same application. ?

The finance organization with a modern consolidation and reporting application is well-equipped to collect and report these regulations next to their current reporting processes. Additionally, a prepackaged application for modern consolidation and reporting applications is available to speed up the implementation. When regulations change, the prepackaged application is updated and released in a timely manner. As other departments must provide and own the necessary data, the CFO Office can act as the data steward. A data steward is responsible for carrying out data usage and security policies as determined through enterprise data governance initiatives, acting as a liaison between the IT department and the business side of an organization. Naturally, this role fits in the CFO Office.?

To forecast and plan for global minimum tax per jurisdiction and to meet CSRD objectives, the next step is to budget and plan for this. A modern Enterprise Performance Management platform that includes capabilities for automated data integration, currency conversion, consolidation &?reporting, budgeting & planning and analysis can support corporations in an easy manner. These platforms are designed to collect and calculate substantial amounts of data for reporting and analysis purposes. No data movement is needed from one application to another, and it includes comprehensive audit trails to meet compliance easier.?

Now is the time to make up your mind. Evaluate and decide the approach you want to take. In this process, take the following into consideration:?

• What is the vision, guiding principles and roadmap to meet the objectives of the CFO Office??
• Is the current Enterprise Performance Management (EPM) application suited to add new regulatory reporting & planning processes for tax and CSRD??
• Are certified prepackaged applications available as an add-on to the current platform??
• Are timely certified updates and new releases provided when regulations change??
• Does your implementation partner have the right subject matter expertise and resource capacity to support you timely??

Conclusion?

A modern enterprise performance management platform with certified prepackaged applications is well-suited to support corporations in complying with the new regulations. Moreover, it will simplify reporting, disclosure, and auditing at the same time. The CFO Office can act as a data steward for consistency and reliability of outcomes.

On March 20th, 2024, at 3 pm (CET) inlumi with BDO will host a webinar on their co-created prepackaged application for Tax Pillar 2, Country-by-Country reporting, and Tax Provisioning.??If you'd like to learn more about this, you can register here.

Marco van der Kooij

Consulting Director at inlumi?