The client is a large multinational company working in the technology infrastructure and services sector. They were in the process of upgrading the last few countries from Oracle 11i to Oracle R12 and wanted to realize the full benefit of the new eBusiness Tax functionality delivered with Oracle R12. As we see with the majority of clients, the existing tax determination logic was basic, it relied on manual processes to ensure the correct tax was applied. The shared service center approach they used meant they were relying on non-tax qualified users, often just data entry clerks to decide what the tax rate should be. This leads to a high number of tax-related mistakes.
The client’s existing design and configuration also meant they were not able to meet some of the VAT and SAF-T reporting requirements in some of the more complex countries they operate in. This included special VAT regions such as the Azores and Madeira in Portugal and the Canary Islands of Spain. They also had some entities that had multiple tax registrations across different tax regimes across the European Union. This was a particular problem to deal with, as not only did the end-users need to choose the correct tax code, they also needed to know what tax regime to use, even though it could have been exactly the same product, depending on whether it was a supply of goods or a supply of services, and depending on where the sale was shipped from it could have a different tax outcome. Further to these complexities, the client engaged with Innovate Tax very late on in the project, as the original service provider had indicated they could manage the tax configuration but failed to fully understand the complex requirements and design a solution.
Within just three weeks, Innovate Tax was able to start the project, even without the full requirements from the client, demonstrating our flexibility. Innovate Tax is able to be this flexible because we bring the core solution with us, which we can rapidly deploy using our prebuilt tax content and determination logic from our repository of over 100 countries. To suit the client’s rollout schedule, the Indirect Tax solution was installed on a country by country basis. Each country was ready from kickoff to initial testing in just one day. This was facilitated by using our award-winning eBTax Rapid Install™ tool. Our approach and rapid deployment method enabled the client’s internal resources to focus on other project activities.
All client-specific requirements were captured in dedicated country workshops to ensure the tax solution was fully automated for transaction processing. Our predetermined solution met more than 95% of the tax logic requirements in the majority of countries we rolled out to. Our proven tax solution meant the client’s shared service teams could focus on processing invoices rather than making tax decisions, enabling much higher levels of compliance and efficiencies throughout the Indirect Tax process.
As the tax is now calculated on a combination of factors such as product, geography, registration status, etc., the client is able to automate more complex tax decisions, such as legal entities operating in multiple countries with multiple VAT registrations. Innovate Tax also provided a suite of tax reports for the Tax Department to streamline their VAT reporting processes. One of the key advantages with Innovate Tax reporting is it allows the Tax Department to proactively monitor tax processing during the accounting period, rather than just at the period end. Our flexible fixed price approach meant when the client did not need us, they had no pressure from our team. We supported the client throughout the project life cycle and then after go live.
What did Innovate Tax achieve with a Global Power Company?
Before engaging with Innovate Tax, the client was looking at a manual tax solution that relied on an end-user who was not adequately trained in Indirect Tax to choose tax rates resulting in a high error rate. The lack of quality tax data meant many reports were difficult and time-consuming to put together, being compliant was always a challenge.
Innovate Tax introduced a truly global solution with tax rates, tax structure, source data, and tax overrides across multiple countries having the same naming convention so that to the users, it was a clear system. At no time does a user choose a tax rate, which is a complete reversal of the manual system used in the legacy system. Instead, users choose the information that leads to the tax rate being applied. The tax logic has preventative measures built in that it does not allow users to enter the wrong tax information. This, combined with our real-time tax analytics tools and reports, meant the number of mistakes was reduced, tax returns preparation improved and total compliance achieved.
- Upgrade of eBTax solution from Oracle 11i to R12 for a global power company.