Case study - global tax compliance, reporting and statutory accounts for US listed luxury fashion retailer operation

What was required?

Our client experienced a period of rapid growth and their internal tax and finance operations function was not sufficient for a group operating across the globe.

The client partnered with Mazars for direct tax compliance and reporting, global transfer pricing compliance and statutory financial statement services for all locations outside of the US, primarily working with:

• The Global SVP of Tax and Statutory Reporting
• Their EMEA and APAC Controllers

The primary objectives of the client over a 3-4 year span were for:

• Mazars to be an agile partner and support the group through the build-out of their global tax and finance teams. This included helping their new finance hires integrate in their business units;
• Ensure that the group became (and remained) compliant across all CIT and SFS workstreams globally
• Provide them with real-time visibility on the compliance progress and associated documents of their non-US tax operations
• Ensure that tax reporting is technically accurate and reduce the amount of prior year adjustments

How did we help?

We immediately installed an experienced global steering team that managed the transition of work to Mazars. The global transition was completed in one phase and primarily focussed on appropriately transferring the knowledge from the previous advisors whilst implementing standardised processes and deliverables that aligned with group reporting objectives. Supporting the steering team were two dedicated coordination teams in London and Singapore.

Following the successful transition, the key elements requiring focus were ensuring that the group was compliant globally and improving the quality of tax reporting. These were two matters that were not achieved prior to our engagement. Underpinning the success of achieving global compliance was the use of InControl and our strong governance model. The use of both enabled for statutory and internal deadlines to be communicated and known globally and increased the accountability of all staff involved in the engagement.

Legacy issues still impacted upon the quality and efficiency of global tax reporting. In a measure to try and solve this and also to address any inefficiencies caused from the time zone differences, Mazars relocated the Client Relationship Manager (CRM) to the US for two years. The CRM then spent significant time with the clients central teams and built on the already strong relationships.

The critical aspect of this relocation was that the CRM was able to fully understand the tax reporting difficulties experienced by the central team. Together, with the help of the client’s staff, the CRM modified the client’s global tax reporting package so that it catered for the requirements of local countries whilst being technically interpretable from a US HQ perspective. The CRM then took responsibility for risk-reviewing the tax packages from each country prior to circulation to the client’s reporting team.

Another key element that underpinned the success of this engagement was that all global Mazars and key client stakeholders met in person twice a year. The meetings proved extremely useful to drive two-way feedback and for global business updates to be confidentially shared and discussed. The client completed a multi-billion dollar acquisition during our engagement and it was in these face to face meetings where key tax and accounting aspects of the transaction were discussed and any issues resolved.

Key learnings

Client and advisor collaboration is key throughout the transition phase in order to ensure that scoping, processes, technology and KPIs are agreed upon in respect of each country whilst being aligned to HQ strategy.

Familiarity with key stakeholders is important so that honest, transparent messages can be shared in confidence and each party places the trust in the other to ensure pragmatic actions are taken.

Operating a global engagement through a central governance team that are then underpinned by regional leads proved vital in ensuring that the client was made aware of all local law updates that impacted their business.

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