Exclusive: CCH Integrator's product manager reveals technology's role in CBC reporting

Daphne Lee, Product Manager at Wolters Kluwer Australia's CCH Integrator, is taking big strides in helping simplify complex tax compliance processes for multinational enterprises.

With over two years in her current position, Lee's mission is clear: to deliver solutions that save time, improve efficiency, and mitigate tax risks for professionals around the globe.

"CCH Integrator has been empowering tax professionals for over two decades, serving not only Australia but also an international audience," she explained.

Lee's work involves closely engaging with customers and tax authorities, staying ahead of legislative changes, and ensuring the platform remains compliant and relevant.

Her approach centres on understanding client challenges firsthand. "On a daily basis, I engage very closely with our customers to empathize with their ever-evolving needs," she said. This includes attending events, conducting webinars, and hosting quarterly business reviews to identify gaps in existing offerings.

Lee also liaises with tax authorities to stay informed about regulatory developments, ensuring that the platform adapts to new compliance standards.

"All of those insights drive my decisions on the next product offering or enhancements needed to solve today's challenges," she added.

Understanding Country-by-Country Reporting

CBC (Country-by-Country) reporting and BEPS Pillar Two reporting are distinct yet interconnected components of global tax transparency.

CBC reporting requires multinational enterprises (MNEs) to submit a comprehensive breakdown of their financial activities, including revenue, profit, taxes paid, and economic activities, in each jurisdiction where they operate. This granular data helps tax authorities assess profit-shifting risks. BEPS Pillar Two, on the other hand, is targeted at organisations with a combined annual revenue of more than 750M Euro, and focuses on implementing a global minimum tax rate of 15%, ensuring MNEs pay a fair level of tax regardless of where profits are located.

A significant focus of Lee's work is country-by-country (CBC) reporting, a compliance framework developed by the Organisation for Economic Co-operation and Development (OECD).

"CBC reporting requires organisations to disclose financial data jurisdiction by jurisdiction rather than at a group or entity level," Lee explained. As part of the OECD's Base Erosion and Profit Shifting (BEPS) Action Plan, its goal is to ensure profits align with economic activity in each jurisdiction.

While CBC reporting does not generate additional revenue for tax authorities, it enhances transparency and aids in risk assessment. "It helps tax authorities identify aggressive tax practices that might otherwise go unnoticed," she said.

However, implementation challenges vary by region. "Despite the OECD framework, jurisdictions adapt CBC reporting differently, which creates complexity for organisations operating internationally," she noted.

Challenges in CBC Compliance
For multinational enterprises, data collection is the most significant hurdle. "CBC reporting requires standardised data across multiple jurisdictions, which is rarely straightforward," Lee explained. She highlighted issues such as different enterprise resource planning (ERP) systems, varying accounting practices, and inconsistent data formats across global offices.

"These nuances stack up, making standardised data collection a complex task," she added. Limited resources and rigid compliance timelines further compound the problem, leaving tax teams under pressure to meet high standards of accuracy.

The Role of Technology in CBC Reporting
Technology, Lee believes, is pivotal in overcoming CBC reporting challenges. Platforms like CCH Integrator streamline processes by consolidating data from diverse sources into a single interface.

"CCH Integrator acts as a bridge, connecting various data sources so tax professionals can process, analyse, and report data more efficiently," she explained. The software's scalability and audit readiness also help organisations navigate compliance complexities.

Additionally, automation and AI play an emerging role in enhancing CBC reporting.

"AI can help manage content and provide insights into data trends, allowing tax teams to focus on more strategic tasks," Lee said.

She sees technology as a long-term solution for cost efficiency and risk mitigation. "Proven software not only simplifies compliance but also strengthens governance frameworks," she added.

Data Reuse and Efficiency
A key feature of CCH Integrator is its emphasis on data reuse. "Data captured once can be repurposed multiple times," Lee explained. By integrating data from various tax processes, such as corporate income tax preparation, the platform reduces duplication and improves accuracy.

"This approach not only saves time but also ensures that reconciliation is pre-established, reducing manual intervention," she added.

While CBC reporting provides a diagnostic tool for understanding MNEs' global tax strategies, the data it collects can inform and facilitate compliance with Pillar Two by identifying jurisdictions with effective tax rates below the minimum threshold, thereby aiding in calculating top-up taxes under Pillar Two rules.

Together, they form a cohesive approach to addressing tax avoidance and fostering equitable tax practices.

Balancing Collaboration and Security
Handling sensitive financial data across global entities requires stringent security measures. "We adhere to the highest security standards, with nuanced access controls ensuring that only authorised users can access specific data," Lee said.

These controls enable collaboration without compromising security. "Tax managers can be confident that data is secure while allowing other team members to contribute to the reporting process," she explained.

Looking Ahead
As Wolters Kluwer evolves, Lee remains committed to innovation and education.

The company reinvests 8–10% of its annual revenue into product development, incorporating emerging technologies such as generative AI to enhance functionality.

"Staying informed about regulatory changes is a top priority, and we work to incorporate those updates directly into our solutions," she said.

Wolters Kluwer also leverages its extensive content resources and partnerships with tax authorities to provide educational outreach to professionals worldwide.

Lee's ultimate goal is to empower tax professionals to navigate compliance with confidence. "By offering solutions that are fit for purpose and best in breed, we help our users save time and improve efficiency," she concluded.