Relocation concerns the production of goods and also of services. If it is almost usual to reach a company’s customer service situated abroad - without knowing it -, the same happens more and more often in the finance and accounting sector.
To rationalise the accounting process applied to account preparation and cash management (i.e. clients’ and suppliers’ payments), many international groups are relocating the services dealing with their various European entities to a single place, a shared services centre, most of the time situated in an English-speaking country.
The subsidiary’s books are held according to the group chart of accounts. Employees who speak the subsidiary’s language are often hired. Nevertheless, a contact in the country of origin is required most of the time in order to comply with the local tax and accounting obligations. Because of the subsidiary’s mandatory chart of accounts, of the standardized accounting and tax declarations, of the permanent, at least annual developments in tax legislation - and now also accounting legislation due to the IFRS standards -, it is essential that the shared service centre works in cooperation with a French expert in this area. Very often the expert concerned is an accounting firm, as the local in-house department does not exist any more or is not dedicated to preparing the mandatory documents required, e.g. corporate income tax return, annual accounts, VAT and business tax returns, new tax returns applicable to the subsidiary, etc. In this respect, the IBS department (International Business Services) at Schacchi has been dealing with this type of clients and issues for more than 25 years. Then, the purpose is not only to enable French subsidiaries to prepare the necessary documents in due time, but also to anticipate the consequences of possible tax or accounting audits whose financial impact may be highly significant for them.
Preparing the annual, tax and statutory accounts does not by far represent the only assignment of the external service supplier. For example, the following essential tasks may not be anticipated by the shared service centre:
• Optimized compliance of in-house bookkeeping with French accounting obligations (see our article Summary of the accounting obligations in France ) • Mapping of group accounts and statutory accounts • Reconciliation of equity capital between group accounts and statutory accounts • Reconciliation of sales recorded and sales declared for VAT purposes • Reconciliation of salaries recorded and salaries declared to social organizations • Preparation of new mandatory declarations (new tax, exceeded thresholds, etc.)
It is essential to prevent the savings generated by the shared service centre being cancelled by the financial consequences of a French authorities’ audit. For more information, please contact Didier Hémion
Address: IBT Partners - 17 rue du Colisée - 75008 Paris - France
