|By PR Newswire||
|April 9, 2014 11:39 AM EDT||
NEW YORK, April 9, 2014 /PRNewswire/ -- While industry leaders continue to rank cloud a key driver in business transformation for enterprises over the next three years, results of a new survey from U.S. audit, tax and advisory firm KPMG LLP indicate that many companies remain lost when it comes to the tax implications of doing business in the cloud – leading to missed cost savings and raising the spectre of future tax liabilities and reputational risks.
Lack of awareness continues to make tax an afterthought in cloud strategy implementation, the survey of some 250 chief tax officers and other senior tax executives in the U.S. suggests. Particularly telling is that almost all (92 percent) of survey participants said they have not taken advantage of existing statutory credits at the state and local tax levels for cloud investment.
"Our survey underscores that there continues to be a significant disconnect between the tax department and business operations and the C-suite when it comes to getting tax involved early on with cloud business decisions," said Steven Fortier, a KPMG principal and co-leader of the firm's Cloud Tax Initiative.
"The outcome," Fortier added, "is that cost savings, such as tax credits and other incentives related to the cloud, are being missed while the potential for reputation risk and tax liabilities, including hefty penalties down the road, is increasing."
When compared against a separate KPMG survey, which reports that 59 percent of providers said cloud is driving innovation in products and services and 54 percent feel cloud is driving innovation in processes, several of the new tax in the cloud survey findings underscore that tax executives' perceptions are 'out of sync' with the cloud-related expectations for their organizations. For instance, a vast majority of respondents (85 percent) said their company is not considering investing in a data center in the future and another large group (67 percent) said their company is not planning to consume infrastructure as a service from a third-party cloud provider.
The results point to the need for earlier involvement by tax departments in their organization's cloud business strategy, greater alignment between tax and other business functions to capture potential tax benefits and mitigate risk inherent in doing business in the cloud, increased investment in infrastructure to support tax data, and improvements in transactional transparency.
"When it comes to cloud strategy, tax can add a tremendous amount of value if engaged early in the decision-making process," said Reid Okimoto, managing director in KPMG's State and Local Tax practice and co-leader of the firm's Cloud Tax Initiative. "Early investment by tax can result in increased cost savings, greater return on investment and enhanced risk management across the enterprise. Finding ways for tax to add value to the overall cloud business strategy should be 'Job One' for well-run tax departments."
Money on the Table
While many companies seem to be aware that federal credits are available related to cloud investment, the survey findings revealed that fewer executives are aware of credits that exist at the state and local level, including research and development credits. Of the 8 percent, though, who have been taking advantage of state and local tax credits, most are using R&D credits.
When asked about the biggest challenge facing their company from a tax perspective, as it begins to utilize cloud technologies, 31 percent cited IT-related issues, such as server location, service level commitments from third-party providers, and others -- a slight increase from 27 percent a year ago. The most significant tax issue continues to be correctly identifying tax obligations and filing the right forms, according to 36 percent of executives, down from 44 percent in 2012.
The survey also pointed out that nearly half (47 percent) of respondents cite the ability to balance tax risk inherent in multijurisdictional compliance against potential customer complaints and the perception of poor customer service as their biggest cloud concern in relation to state sales tax. This represents an increase from 42 percent in 2012.
Whether related to sales tax or value-added tax (VAT), approximately half of respondents surveyed (56 percent) admit that they either trust their vendors or are not paying close enough attention to how tax is collected or remitted on cloud transactions.
In commenting on the survey in general, Okimoto said: "Companies would be wise to evaluate their infrastructure investment in cloud moving forward. It can help them both benefit from existing tax credits and incentives while adequately preparing for future needs, such as reporting and compliance requirements of evolving cloud legislation and regulation."
KPMG's "Tax in the Cloud" Benchmarking Survey, which was conducted during the second half of 2013, collected responses from a total of 250 U.S. senior tax executives involved with international, federal, and state and local taxation, in a broad range of industries.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 155,000 professionals, including more than 8,600 partners, in 155 countries.
Robert Nihen/Bridget Carroll
SOURCE KPMG LLP
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
Feb. 25, 2017 10:45 PM EST Reads: 8,573
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Feb. 25, 2017 10:30 PM EST Reads: 1,854
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackIQ...
Feb. 25, 2017 09:45 PM EST Reads: 9,310
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
Feb. 25, 2017 09:00 PM EST Reads: 9,120
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Feb. 25, 2017 08:45 PM EST Reads: 4,715
FinTech is the sum of financial and technology, and it’s one of the fastest growing tech industries. Total global investments in FinTech almost reached $50 billion last year, but there is still a great deal of confusion over what it is and what it means – especially as it applies to retirement. Building financial startups is not simple, but with the right team, technology and an innovative approach it can be an extremely interesting domain to disrupt. FinTech heralds a financial revolution that...
Feb. 25, 2017 08:45 PM EST Reads: 1,935
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Feb. 25, 2017 08:00 PM EST Reads: 13,554
In his session at DevOps Summit, Tapabrata Pal, Director of Enterprise Architecture at Capital One, will tell a story about how Capital One has embraced Agile and DevOps Security practices across the Enterprise – driven by Enterprise Architecture; bringing in Development, Operations and Information Security organizations together. Capital Ones DevOpsSec practice is based upon three "pillars" – Shift-Left, Automate Everything, Dashboard Everything. Within about three years, from 100% waterfall, C...
Feb. 25, 2017 08:00 PM EST Reads: 11,323
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Feb. 25, 2017 08:00 PM EST Reads: 1,913
SYS-CON Events announced today that Addteq will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Addteq is one of the top 10 Platinum Atlassian Experts who specialize in DevOps, custom and continuous integration, automation, plugin development, and consulting for midsize and global firms. Addteq firmly believes that automation is essential for successful software releases. Addteq centers its products an...
Feb. 25, 2017 07:45 PM EST Reads: 526
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Feb. 25, 2017 07:30 PM EST Reads: 1,807
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Feb. 25, 2017 07:00 PM EST Reads: 8,823
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
Feb. 25, 2017 07:00 PM EST Reads: 1,690
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Feb. 25, 2017 06:45 PM EST Reads: 1,938
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Feb. 25, 2017 06:30 PM EST Reads: 1,395