Success Story - Air Liquide

Challenge

Prior to 2020, Air Liquide struggled with a time-consuming international compliance process that limited their ability to conduct thorough analysis and efficient review of their foreign entities. Manually managing more than 140 complex foreign forms for two consolidated filings overwhelmed the team, requiring extensive time spent processing multiple imports, troubleshooting legacy calculation discrepancies, and reconciling amounts for each of the 100+ foreign entities.

Inefficiencies around workstreams triggered rework, rekeying, and potential errors. This, in turn, resulted in long hours and prevented the team from analyzing and reviewing data in order to plan strategically — adding stress at the height of busy season.

Recognizing the need for modernization, the international tax team wanted to find a way to streamline workflows, reclaim time for reviews, turn data into meaningful information, and eliminate the need for additional external resources.

Solution

To accomplish these goals, Air Liquide implemented CSC Corptax^® International Compliance with integrated Next Gen forms and workpapers.

In the first year of implementation, the team developed a standardized workflow for each CFC, beginning with imports of foreign trial balances and adjustments using CSC Corptax^® Office. Corptax Next Gen forms pull in calculated amounts to automate supporting workpapers – resulting in a streamlined prep and review process. In each of the following years, the team can then easily update their supporting workpapers for changes in form instructions by referring to the automated Corptax forms, which reflect the latest changes published by the IRS.

In addition to leveraging time-saving automation in complex forms like the 5471 and 1118, the team developed analytics and models using foreign data extracted from Corptax’s International Diagnostics to better understand their data and gain deeper insights. Some examples of their in-house models include:

• GILTI Analysis: Evaluates various scenarios related to GILTI inclusions and analyzes high tax exceptions for foreign entities to support informed decisions regarding tax obligations. This in-house model is built using inputs from the 951A international diagnostic report in Corptax.

• CFC Stock Characterization: Characterizes CFC stock to allocate interest expenses accurately per regulatory requirements, streamlining overall compliance. This in-house calculation is developed using data points from various international and ownership reports in Corptax.

Results

Through this initiative, Air Liquide streamlined and optimized their international compliance process. Now, Air Liquide gains insights into crucial calculations through international diagnostics, such as dividend look-through, E&P, and GILTI. They leverage this data to augment offline workpapers, significantly improving data quality and relevance for review. For example, the team can now download CFC data from the 951A Corptax diagnostic to feed their GILTI analysis model at any point in time, allowing management to understand how specific CFC inputs can lead to various tax impacts for the US filer.

Using Corptax calculation logic, the team standardizes their workpapers for filings such as Forms 5471, 8990, and 8992. They also appreciate the speed with which Corptax implements IRS updates into the software, which gives them increased confidence in the quality of their international forms.

Next Gen automation cuts form prep from an average of six hours to four hours per form, saving the team 280+ hours annually. The team also eliminates reliance on outside resources and reduces redundancy in reviewing multiple workflows. Air Liquide reallocates time-savings to focus on streamlined reviews and management reporting, analysis of foreign entity mergers and acquisitions, and preparation for potential impacts from legislative updates and changes.

Automation also produces more reliable tax filings and makes real-time information readily available to develop analytics that management can use for tax planning. As Air Liquide’s Tax Principal explains, “The transformation optimized our international data and workflows significantly. Now, we utilize Corptax to easily access and manage structured foreign data centralized in a single system instead of struggling with maintaining historical records in Excel. These improvements resulted in a more efficient prep and review process, meaningful results, and actionable analytics.”

Today, Air Liquide:

• Saves approximately 280+ hours of international tax compliance work they redirect towards other high-value tasks and projects

• Manages data and E&P records for over 100 foreign entities with less manual work and minimal need for external resources beyond the international tax team

• Furnishes real-time analytics and models to management by leveraging foreign data in Corptax

• Focuses on data optimization and international tax planning instead of reconciling and troubleshooting foreign calculations and forms