Success Story - PepsiCo, Inc.

Challenge

PepsiCo’s team of two managed all Country-by-Country Reporting (CbCR) using Excel-based templates to collect and aggregate data coming in for 1000+ business units comprising 600 constituent entities across 90+ jurisdictions.

An inconsistent mix of responses in US GAAP and local STAT done by sector, country, and entity made performing sanity checks on the data next to impossible. They massaged the data in an Oracle database, manually pushed the data back into Excel, and then, back into Corptax.

By housing all their supporting BEPS CbCR data in Excel, they experienced limited visibility, confusion, and duplicated effort. This exposed PepsiCo to unnecessary risk and chewed up valuable time and energy.

Ultimately, Tax Director Jennifer Edwards asked, “Why are we collecting all this data when it’s already been collected?” So, they decided to replace their “old methodology” and compile CbC reporting using proven federal and US international return data in Corptax — and ultimately reuse that data for Global Minimum Tax (GMT) purposes.

Solution

After conferring with Corptax, PepsiCo implemented CSC Corptax^® BEPS CbC. They launched their transformation in 2020 by first replicating offline as-filed calculations in Corptax, ensuring consistent account mapping and treatment between Corptax and their offline process. When they found discrepancies, they revised the tax data collection packages to account for changes going forward.

With prior-year issues resolved, they brought the process into the current year. They used CSC Corptax^® Office POV to automatically pull CbCR Table 1 amounts from Corptax and when necessary, automatically push adjustments or modifications back in.

After filing the current year CbC report, they applied the same principles to GMT work. The team then used their US compliance and CbCR datasets — which already contained mapping incorporated during CbCR — for GMT planning. They compared offline results to Corptax results after ensuring all entities and accounts were correctly set up.

Results

Right off the bat, PepsiCo’s new process revealed missing and/or inconsistent data in templates provided by their widespread network of owners. For example, not all tangible assets or revenue accounts had been included.

Now, after running with the process for a year, the team measures savings of ~320 hours and $60,000 in unnecessary consulting fees. They eliminate error-prone offline calculations and risks related to manually moving data. Plus, the CbCR team relies on a single source of truth to ensure consistent treatment for all CbCR data instead of struggling with misaligned input they used to receive.

And as Jennifer Edwards says, “We built space to actually sit back and digest the data, create analytics, and get our international and domestic tax planners involved in the review process.”

On the GMT front, after running initial Corptax calculations parallel with offline calcs, the same jurisdictions were identified for the GMT Top-up Tax. As they continue to understand the intricacies of Pillar Two calculations, they will look at a more detailed implementation and review of GMT calculations and reporting.

Jennifer Edwards sums it up: “Because we leverage so much of our CbCR process for GMT, we’re ahead of the game and already evaluating safe harbors using our Corptax data.”

In short, the team:

• Saves ~320 hours by leveraging data already in Corptax
• Cuts $60,000 in outside consulting fees
• Ensures accurate, complete information on 600+ legal entities
• Ensures US compliance, BEPS CbC, and GMT data align
• Invests time-savings in understanding CbC data and creating year-over-year analytics for tax planner review