Five benefits of KPMG Automated Tax Engine (KATE)

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How important is technology in the Tax function for the company’s strategy?
How relevant is investing in emerging technologies for Tax?

We are currently at a fiscal tipping point with significant challenges affecting and disrupting Tax departments, in the wake of new complexities, constraints and opportunities. Accelerated by technology, digitalization enables access to data & analytics, increasing expectations for real-time visibility, lowering the risks of human error, while overcoming the lack of capacity to process large volumes of transactions.

Digital transformation is, nowadays, a requirement that companies should cover in all their departments to stay competitive. Through technological solutions, Tax is able to optimize its time, costs and resources, automating repetitive processes that currently consume large amounts of time.

Authorities are requesting information and reports that involve the use of technology for a timely compliance. In this context, organizations may consider the five main benefits of implementing technology solutions for their Tax departments:

1. Process optimization

With technology, repetitive processes such as cross-checking of various transactions to determine the value added tax (VAT) may be done in a fraction of the time normally required. It also allows condensing the income and identifying the factors required to obtain the provisional payment of income tax (IT), therefore the workforce's efforts may be focused on more strategic activities, and Senior Management can make informed decisions based on more accurate data.

2. Immediate reaction

Tax authorities constantly require information on short notice. The ability of an organization to react in a timely manner can result in significant savings in terms of fines or penalties. Having a digital tool that allows the generation of reports with the information requested by the authority is vital for proper compliance.

3. Compliance with new requirements

As well as the business environment and regulation experiment constant change, organizations need to adapt to these changes with the best technology available to provide a timely response. Tax authorities in Mexico have been asking for information regarding specific operations that a company may have had with taxpayers that appear in the 69B list. Likewise, they request the reconciliation of income of what the organization reports from its enterprise resource planning (ERP) and the digital tax receipts (CFDI) the authority has in its database. The use of an automated system facilitates being up-to-date with these requirements, bringing certainty to the companies in terms of compliance.

4. Invoice reconciliation and payment complements

Due to the stricter controls that were implemented in Mexico, another recent requirement of the authority is a report in which the invoices are identified together with their payment complements; the foregoing, in order to make valid the creditable VAT that the companies report. Having the right technology allows to comply with.

5. Mass download of CFDIs

To ensure that what is reported is accurate and consistent with the authority's databases, all the operations registered must be downloaded directly from its platform. This allows validating the information recorded in the accounting systems or identifying the causes of potential differences. The implementation of technology permits to safely access those files, while an automated process increases efficiency. An automated system can download and validate up to 24 million CFDI per day.

51% of Chief Tax Officers (CTOs) say compliance with legislative and regulatory change, as well as implementing new emerging technologies are the top strategic priorities for their Tax function
Reference: 2018 Chief Tax Officers study, KPMG International.

76% of CTOs say investment in data & analytics and in emerging technologies will see the biggest increase in the Tax function
Reference: Technology in tax. Making the best of artificial and human intelligence. KPMG International, 2018.

KPMG Automated Tax Engine (KATE) is a proprietary cloud-based solution built by tax accountants that understand your business. This automated live data feed connected directly to the Mexico Tax Authority (SAT) can automatically download up to 1 million CFDI per hour for a date range of up to five years.

This solution includes the specialized assistance of an advisor who will go through the whole process shoulder-to-shoulder with your Tax function. KPMG in Mexico Tax experts are prepared to work with your company on the design and implementation of technology tailored to your Tax department. Reach to them to determine the best way KATE can help your business.

Our services

KPMG Automated Tax Engine offers a technology enabled managed accounting service in the form of a proprietary innovative high-tech cloud-based software that helps processes and being ready for authority requirements such as:

— Automated VAT calculation
— Automation of the calculation of the provisional payment of ISR
— Identification of operations with 69B listing
— Revenue reconciliation ERP vs. CFDIs (SAT)
— Reconciliation of payment plugins vs. bills
— Mass download of CFDIs
— Invoice validation
— Withholding certificates
— Converting balance and chart of accounts to xml
— Ability to switch between Spanish and English