INFORMATION TECHNOLOGY

FinTech

Tech-based tax services gain pace to ensure businesses comply with global digital transparency standards

Global consultancy EY among firms now offering advanced services that redefine how companies face new developments in tax, audit and compliance

PUBLISHED : Tuesday, 08 August, 2017, 4:06pm
UPDATED : Tuesday, 08 August, 2017, 4:06pm

Rigid new global initiatives to increase transparency of business data are giving rise to more advanced professional tax services, which employ innovative tools that include cloud computing, financial technology and artificial intelligence.

“Professional services firms of all disciplines are expecting their workforces to change, which will see many jobs displaced and new roles created for software programmers, data analysts and computer scientists,” Paul Haswell, a partner at international law firm Pinsent Masons, told the South China Morning Post.

“Existing providers who fail to embrace this technology driven future are doomed to obsolescence.”

EY, one of the world’s four largest professional services networks, on Monday announced the creation of a dedicated group of more than 1,000 professionals from its member-firms across the globe for its new tax technology and transformation practise.

Albert Lee, digital tax leader at EY Asia-Pacific, pointed out that the pace of change in tax legislation and the accelerated use of technology by governments for automating compliance and filing processes, are disrupting traditional tax preparations.

EY’s new practise will include a custom tax technology application development, a post mergers and acquisitions tax function, robotic process automation, artificial intelligence, blockchain, and tax analytics and reporting services.

Jim Hunter, managing partner for tax at EY Asia-Pacific, estimated that its tax technology and transformation practise will have more than 5,000 professionals by 2020, helping cultivate new careers for science, technology, engineering and mathematics graduates.

“We have, by far, the leading practise in this space, because we have pooled all of our tax technology and transformation resources from across the Asia-Pacific and linked them with global resources,” Hunter said.

EY’s new practise was established in response to many governments’ commitment to enhance tax transparency and fight cross-border tax evasion, which has prompted many companies to better manage their digital business data to comply with tax laws.

That development is linked with global efforts by the Organisation for Economic Co-operation and Development (OECD) against base erosion and profit shifting (BEPS), which refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

About 70 jurisdictions have so far signed the OECD’s “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Shifting” – a legal document that offers to help governments counter tax evasion, tax treaty abuse and improve dispute resolution.

“Hong Kong indicated its commitment in June 2016 to implement the BEPS package put forward by the OECD. The government has also released a consultation report on measures to counter BEPS,” Hunter said.

“[Mainland] China is also a strong supporter of that BEPS package, which led it to start the e-government audit for big enterprises in Shanghai last year.”