Forvis Mazars’ first annual Global Tax Conference in Miami recently brought together tax leaders from around the world to share insights and practical strategies for staying ahead of evolving tax trends and navigating an increasingly complex global environment.
“The Intricate Landscape of Global Compliance & Reporting (GCR)” session featured a panel of partners from Forvis Mazars focused on evolving tax regulations, compliance and data challenges, and best practices for multinational corporations (MNCs). This article provides a summary of key insights shared during the session.
Evolving Tax Regulations & Technology
The panel highlighted the increasing complexity of global tax regulations, driven by initiatives such as Pillar Two and accounting guidance such as FASB’s Accounting Standards Update 2023-09. These changes demand jurisdictional-level tax effect disclosures, making accurate local compliance and reporting more critical than ever. In addition, companies are now focused on mitigating tax risk that can result from using various disparate tax preparers and advisors across multiple countries. This risk, combined with the need to create efficiencies and consistent processes, has led to a recent push for a centralized approach to GCR.
Furthermore, tax authorities are leveraging technology and artificial intelligence (AI) to enhance scrutiny of disclosures, emphasizing the need for MNCs to prioritize compliance and embrace new technology. Emerging trends such as environmental, social, and governance (ESG) reporting and data standardization are also reshaping the GCR framework, requiring companies to adapt quickly to stay competitive.
As a global tax leader, you worry about filings in various jurisdictions. GCR provides a central team and point of contact to manage global responsibilities, offering peace of mind and visibility through technology and dashboards.
– Phil Laminack, Partner
Compliance & Data Challenges
Managing compliance across multiple jurisdictions presents significant challenges, particularly for U.S.-based companies with limited visibility into global operations. Key obstacles include reconciling differences between U.S. GAAP, International Financial Reporting Standards (IFRS), and local statutory reporting, as well as navigating fragmented processes and miscommunication between local and global teams. When finance and tax functions have translation difficulties, that further complicates compliance efforts. To address these challenges, early identification of local requirements and structured information delivery are essential.
Data management is a critical area of focus. Validating data before reporting not only helps ensure accuracy but also adds value to compliance processes. However, the increasing digitalization of tax reporting by authorities demands robust systems and processes to handle the growing volume and complexity of data. Note that broken processes magnify issues, underscoring the importance of building solid foundations for compliance.
Best Practices for Multinational Corporations
MNCs should consider these best practices to help streamline global compliance:
- Structured Engagements: Companies can take a three-tiered approach:
- Steering Committee – Comprising accountable partners and client decision makers.
- Central Team – Responsible for operational delivery and understanding client needs.
- In-Country Teams – Providing local experience and managing the “last mile” of compliance.
- Centralization & Standardization: Centralizing processes across jurisdictions can enhance visibility and coordination. Standardized procedures help provide flexibility and enable effective management of regulatory changes.
- Leveraging Technology & AI: AI and automation are transforming GCR by streamlining administrative tasks, tracking regulatory changes, and processing data across enterprise resource planning (ERP) systems. Technology helps bridge talent gaps and improve efficiency. However, AI also increases the complexity of multinational operations, making professional guidance important.
- Building Trust & Relationships: Trust and human connections remain at the core of successful GCR. Listening to understand nuances between regions and cultures, identifying and evaluating potential risks, and fostering collaboration between finance and tax teams are vital for long-term success.
- Empowering Teams: Facilitating innovation and empowering the next generation of professionals are key to driving transformation in GCR. Multidisciplinary teams and mindsets open to change are important for companies to stay ahead.
Structured teams enable focus on global tax strategy and efficiency, beyond just compliance
– Eric Flueckiger, Partner
How Forvis Mazars Can Help
MNCs should prioritize trust, structured processes, and technology adoption in their GCR strategies. The GCR team at Forvis Mazars can assist you in achieving efficiency in tax compliance and gaining a clear view of your cross-border tax compliance status. If you have any questions or need assistance, please contact one of our professionals.