Modules in the GlobalTaxCenter

As an IT tool the GTC supports companies in complying with Tax Accounting requirements. Although the relevant specialist literature does not provide a uniform and clear definition of this complex concept, the following areas represented in the table below can be assigned to the concept Tax Accounting:

Tax Accounting Area	Explanation
Tax Reporting	Calculation of deferred and current taxes for financial statement purposes (annual balance sheet, consolidated financial statement, interim financial reporting) Preparation of tax disclosures in accordance with German Commercial Code (HGB) and IFRS Internal reporting of tax positions (e.g. to the Management Board, Supervisory Board, Controlling)
Tax Compliance	Tax declaration (electronic tax return; E-Bilanz) Compliance with legal requirements for tax payments and record requirement
Tax Planning	Tax planning as a part of corporate planning; Database for assessing the recoverability of deferred taxes IAS 34, quarter tax rate
Tax Risk Management	Calculation, planning and management of tax risks

In addition to the core functionality that enables users to calculate deferred and current taxes, there is a variety of additional modules and functions in the GTC. These modules are integral components of the GTC and offer further range of applications to comply with the Tax Accounting requirements. The following table offers an overview:

GTC Module / Function	Explanation
GTC Basic Module	Calculation of deferred and current taxes for the annual balance sheet (German Commercial Code (HGB) and IFRS). Providing the database for tax disclosures.
Tax Planning	Create planning periods in the GTC (IAS 34)
Tax Compliance	Control the compliance with declaration deadlines and payment terms by domestic and foreign companies.
Tax Questionnaire	The module supports the management of tax information. Structured (company-specific) questionnaires are designed to acquire various tax information (e.g. tax audit, country-by-country reporting etc.). Reports provide automated evaluation and analysis.
Tax Risk Management	Using risk-oriented active questionnaires you can calculate and monitor risks. ActionPlans help you to manage the risks and monitor the handling.
Tax Audit	Acquisition of tax audit findings and tax audit risks for status tracking. Using this module corresponding impacts on groups for different tax assessment periods can be considered.
Tax Declaration (ELSTER)	Send the electronic tax return from the GTC (incl. Snapshots module).
Snapshots	Different temporal processing states can be 'frozen' which makes a subsequent recovery possible (e.g. useful for simulated computations).
Flexible Validation	Import of indicators to the GTC that can be then validated using calculated values (useful to validate for e.g. general ledger and subledger). In addition, there are also other validation possibilities (partly automated).
Import and Export of Periods	Reporting date-related inquiries can be exported completely or selectively to another GTC system. The data sets copy is possible without IT support. This facilitates for e.g. mapping of sales.

Calculation of deferred taxes

Calculation of deferred taxes can be carried out in accordance with Commercial Code (HGB), IFRS and US GAAP. Since these accounting standards are based on a (balance sheet) temporary concept, deferred taxes can be calculated considering the following standards:

Commercial Code (HGB)	IFRS	US GAAP
§ 274 German Commercial Code (HGB): individual financial statement	IAS 12: consolidated financial statement	Topic 740
§ 306 German Commercial Code (HGB): consolidated financial statement	IAS 34: interim financial statement

Individual accounting standards have very important differences, for example option to capitalise for the overhang of deferred taxes in the Commercial Code (HGB) individual financial statement (not consolidated financial statement). A relevant differentiation is ensured by individual master data parameters and distinction between German Commercial Code (HGB) and IFRS reporting periods in the GTC.

Calculation of deferred taxes for accounting temporal differences is based on the comparison of balance sheets. Deferred taxes are calculated in the GTC for loss carry forward, interest deductions, tax credits and other tax advantages. The data calculated on this basis appears in the summary that can be used as a book entry. The GTC milestone concept ensures that the predefined process steps and reviews are observed.

In addition to calculation of deferred taxes, further aspects are considered by the GTC. These are, for example, distinctions in the affecting P/L statement (profit and loss statement) and not affecting P/L statement (OCI) processes, tax rate changes, exchange rates or corporate restructuring.

The key output of the GTC is data that is essential for creating disclosures. Thus, for example, reports contain either deferred taxes per balance position or deferred taxes attributable to the tax loss carry forward. The GTC can also generate TRR (Tax Rate Reconciliation).

Calculation of current taxes

The GTC enables users to calculate current taxes. The typical system for tax calculation of balance-sheet and off-balance-sheet corrections is also implemented in the GTC. Automated result attribution or transfer of tax bases in the context of group taxation / tax group is ensured. In addition, proposed values calculated in the GTC (e.g. tax-balance additional profit / reduction in profit) simplify handling and serve validation. The functions of tax calculation differ for German companies and companies in other countries:

German companies

The dialog structure designed in accordance with the national tax law is available to German companies. The dialogs in the tool are based on tax forms (KSt 1 A, Anlage AE etc.). Extensive detail requirements resulting from German tax law are also taken into account. These include issues relating to income tax group and partnerships.

Tax calculation can be carried out in a shortened dialog (Current Taxes dialog) or by means of the above-mentioned form dialog. The shortened dialog can be used for annual balance sheet, it speeds up the closing process. The use of the form dialog is necessary if the tax return is submitted from the GTC to the tax office via ERiC (optional ELSTER module).

Companies in other countries

The focus of tax calculation for foreign companies is on the provision of necessary data for reporting purposes and TRR.

To meet the requirements of relevant tax jurisdiction, it is possible to provide each country from a pool with individual tax calculation (so-called _Toolbox{_}). This pool can be supplemented by individual issues and naming. This facilitates preparation of foreign tax calculations and ensures top data quality for TRR generation.

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