Tax transformation with Cloud ERP

New strategies and operational capabilities to support evolving business needs and tax regulations

To take advantage of the digital transformation, tax departments need to address historical issues with non-tax sensitized business processes but must also ensure they are not creating more complexity in their tax data and business processes. Together, Deloitte and SAP® are supporting our customers’ tax departments with their digital transformation enabled by SAP S/4HANA® Cloud, analytics, and next generation best practices to deliver business value and support future compliance needs.

Tax departments must leverage the enterprise’s digital transformation project as a catalyst for tax compliance transformation, and an opportunity to bring tax into the dialog as business processes are enhanced.

With strategic tax management, tax becomes part of the business decision, making it easier to explore new business models and foster trust in the working relationship with local communities and tax authorities.

Drivers of transformation in tax today

Fundamental shift in the way tax reporting is done*

Tax Authorities and governments are continuously evolving and creating new mandates for enterprises to reduce the VAT gap, prevent tax evasion, and maximize the efficiency of tax collection. This has forced enterprises to provide more tax data than ever, and tax authorities have shifted both how they access that data, and how they audit it.

Globalization and new business models

Enterprises must promptly comply with local regulations in new markets, enable sustainability of the supply chain, and optimize decisions to minimize their tax compliance burden. The tax function must redefine itself and move from managing compliance operations to becoming a strategic partner for the business.

Sustainability and climate change

To further incentivize enterprises to transition to sustainable enterprises and start taking responsibility for their environmental impact, regulators are introducing new regulations, including plastic taxes and emissions certificate systems. Tax professionals need to be ready to comply with new reporting requirements.

Cloud ERP transformation: The catalyst for new-generation tax processes

The digital business transformation enabled by cloud ERP creates an opportunity for tax departments to achieve the changes necessary to meet the challenges of future compliance.

Tax departments can showcase their value through the lens of digital transformation and leverage the power of a cloud ERP to discover new ways to deliver value to the business. For example:

Building a growth platform for tax transparency and fairness
Running simple and integrated digitalized tax processes
Reducing risk and scale globally

Cloud ERPs are enabling tax professionals to reimagine compliance in real time within business processes, providing immediate insights into tax risk, as well as predictive analysis for optimizing future choices.

The future of tax: Business transformation with Deloitte and SAP S/4HANA Cloud

Digital business transformation

A digital business transformation powered by Deloitte and SAP S/4HANA Cloud presents an opportunity for tax departments to embed tax requirements into business processes and creates a sustainable foundation that can adapt to future compliance needs.

To leverage the new cloud ERP, tax professionals should be aware of the general opportunities that having tax embedded into the ERP design can bring. These opportunities include:

Enabling the tax department to have a more strategic mindset
More effective control over risks, and
Operational efficiencies that help minimize costs

Entering a new market

Entering a new market brings significant compliance challenges, from learning local requirements, to building solutions. SAP S/4HANA Cloud with SAP Document and Reporting Compliance is ready to meet compliance needs of both existing and potential new markets, providing the agility businesses require to win in the digital world.

It provides peace of mind to:

Manage all types of mandates, enabling simple adoption of constant legal reforms while reducing cost and providing transparency
Facilitate adoption of constant legal reforms in an efficient way
Mitigate risks, reduce financial statements, and tax audit risks by increasing transparency, guaranteeing full digital audit trial, and providing traceability to underlying transactions
Readily comply with the latest environmental regulations and limit the environmental, social, and economic impact of businesses.

Unlocking measurable tax value through business transformation

Buinesses find that by including tax in the beginning of the digital transformation project, they can unlock benefits that support the overall positioning and business case for the transformation itself.

To measure the business value, both quantitative and qualitative benefits should be considered. Quantitative benefits are often easier to capture and rationalize. These include:

Cash tax savings and minimizing tax leakage
Time savings
Reduction in future costs

Alongside these quantitative benefits, there are also many qualitative benefits that can be achieved through ERP implementation.

Examples include:

Increase in actionable insights
Ensure compliance
Enhanced risk management

"We’re in a fortunate position because we’re in the middle of a finance transformation. Upstream finance and supply chain processes are already undergoing a significant redesign, meaning we can ensure they are designed and implemented in a way that will provide the outputs that we need to feed our tax processes. Without finance transformation, that would be very difficult."

- Eleanor Macdonald, Tax Technology and Transformation Lead, Anglo American

Our example

Finance transformation enabled by SAP S/4HANA

Deloitte supported a major consumer organization in its finance transformation enabled by SAP S/4HANA. As part of that transformation, it was estimated that thirty percent of the return on investment would come from tax-related benefits. These benefits had both quantitative and qualitative drivers. These include tax sensitizing the business processes in SAP S/4HANA, complemented by tax processes and tax technology solutions that support a sustainable and agile business across various tax types, such as indirect tax determination, compliance, operational transfer pricing, group tax reporting, and corporate income tax. The tax department can leverage SAP S/4HANA Cloud as it has been intended, automatically generating and using data in a more strategic and value-added way. This ensures compliance at minimum cost.

Our thinking

Interested in learning more?

Deloitte and SAP enable enterprises to gain immediate tangible benefits. Improved compliance and increased efficiencies facilitate optimizing tax strategy, easily adapting to future needs.

Download the report

Deloitte and SAP: Transforming tax together