1. Purpose and Content of Tax Reporting

This procedure describes purpose of Tax Reporting and how it is managed in BFC, as well as other related customizing in other BFC modules.


1.1 Purpose and Actors

Core principles

The tax package aims at reporting the income tax charge at entity level

The objective of the tax package is

  • to isolate the Adjustments from the IFRS EBT
  • to calculate the IFRS and Underlying income tax expense for the period

Scope: WW consolidated companies (IG / IP / not required for MEQ)

Actors involved and responsibilities

  • GAR Tax Reporting manager is responsible
    • to calculate the IFRS and Underlying income tax expense for the period (at Group level);
    • to compute and monitor the Underlying Tax Rate (“UTR”) of the Group for continuing operations;
    • to monitor the income tax paid in the Free Cash Flow; and
    • to ensure compliance with IFRS requirements.
  • Country Accounting Managers (“CAMs”) with the support of Tax Compliance Managers (“TCMs”) if any are responsible
    • to fill the tax packages in
    • to timely provide accurate information in BFC

1.2 Reporting periods and Content

Reporting periods for Taxes organized around :

  • Interim reporting (quarterly: March, June September): Projected tax rate methodology
  • Hard Close (October) and Year-end reporting: Actual (enacted) tax rate methodology

In order to comply with the above, the tax package has been divided in two phases

  • Actual1-Tax phase/category that aims at calculating, during interim periods, the Underlying projected Tax Rate (“UTR”) based on full-year forecasts of the Underlying EBT (Earnings Before Tax)
  • Actual2 phase / category that aims at calculating during Hard Close and at Final Year End the YTD income tax charge of the period


INTERIM PERIODS - overview



HARD CLOSE and YEAR END - overview

For more detail, refer to the Tax Package guidebook published in GAR AODOC Library.


1.3 BFC Administration's role

BFC Admin team is in charge of:

  • reporting set-up and package generation related to both ACTUAL1-TAX and ACTUAL2 categories
  • specific pre-loadings of the packages (Tax Rates / P&L YYYY.09 for Hard Close)


2. Definitions

GAR Team - Group Accounting & Reporting Team (including position of  Tax Reporting manager)

FSL BFC-Admin Team - Team administrating BFC (Solvay Group Consolidation tool) in SU FA from FSL (Finance Service Line)

FSL CAM - Company Account Manager in FSL (Finance Service Line) 

FSL TCM - Tax Compliance Managers in FSL ( Finance Service Line)

IG - Full Consolidated method

IP - Proportional Consolidation method


2. Reporting Setup

2.1 ACTUAL1-TAX (Interim periods: March, June and September)

2.1.1 Reporting Organizer

In the Reporting Organizer module it is created the Reporting ID and it is defined the common data for the packages, as the Deadline, Folder, Set of Controls, Opening Balances, etc.

An option to create the Reporting for a new period is through the option Saving As based in the last version available.

In this procedure it will be created the ACTUAL1-TAX category for the period 2022.03, so the Reporting ID to be entered as reference is ACTUAL1-TAX - 2021.09.



The General tab defines the general properties of the reporting ID.

Enter the following information:

  • Category - ACTUAL1-TAX
  • Data entry period - 2022.03
  • Short & Long description - Phase Tax Reporting- 2022.03


The Definition tab indicates the reporting status. It can also be specified the associated category scenario and the start and end dates for the reporting.

Enter the following information:

  • Version: refer to this document "BFC Admin Reporting set up per category and period" to get the category scenario version to be used
  • Start & End Date: It can be specified the scheduled start and end dates. The reporting status depends on these dates. Enter a large range, e.g. January 1st of current year to Jan. 1st next year.


The Package tab defines the settings of the data entry environment for the packages.

Enter the following information:

  • Blocking - Flag the option Blocking.

Opening Balance data:

  • Category: ACTUAL2 - as reference of Year End from previous year (no ACTUAL1-TAX at Year End)
  • Data entry period: YYYY-1.12 - Inform the period which the opening balances are retrieved. Always December of previous year.
  • Scope: SOLVAY14-  includes consolidated companies.
  • Variant: 2 - IFRS Norms.



The Restrictions tab defines the data entry restrictions which are applied when the data is entered.

The flow F00 (Opening Balances) must be informed in Read-only Flows, this way it will not be available for edition in the package.

Data entry restrictions SSCONSO.


The Operation tab defines the settings to publish the packages. 

In the Deadline it has to be informed the date that the packages will have to be published.

It has to be changed each quarter, according to date defined in the Finance Accounting Closing Calendar available in the GAR AODOCs Library.



The Translation tab defines the object descriptions for the selected language. 

Both French and English should be informed.



2.1.2 RU Organizer

In the RU Organizer we define the companies to be reported in the category.

Select the IG and IP packages in the RU Organizer module from category ACTUAL2 / previous period and copy (through the icon  or Ctrl+C). 





Change the period to the one that is being created and paste packages (through the icon  or Ctrl+V).




Then the reporting packages are created in RU Organizer module.

Note that the packages will have the status , meaning that they are still not available in the Package Manager module.




Before Generate the packages to the Package Manager module, ensure that all the companies are with the correct Consolidation Method (column Entity Portfolio), and if any company needs either to be added or deleted


Companies entering or leaving the Solvay Group are registered in the following file Solvay Structure file available in GAR AODOC Library


2.1.3 Package Manager

To make the reporting available in the Package Manager module, select all packages and with the right click choose "Generate Package at Current Site".



The package status changes to , meaning that the package are now available in the Package Manager module.


2.1.4 Pre-load of package data: Tax Rates

In order to facilitate the work from FSL CAM and TCM's, BFC Admin pre-loads the Tax rates in schedule T1-1, flow F99, as follow: 

  • ACTUAL1-TAX  03.YYYY = pre load 12.YYYY-1 from ACTUAL2
  • ACTUAL1-TAX  06.YYYY =pre-laod 03.YYYY from ACTUAL1-TAX
  • ACTUAL1-TAX  09.YYYY = pre-load 06.YYYY from ACTUAL1-TAX


Content of T1-1 Schedule


This pre-loading consists in a manual procedure of export and import package data trough csv files. 

2.1.4.1 Download package data

To pre-load March, 12.YYYY-1 (ACTUAL2) package data should be extracted to csv file.

 Select all packages and Export.


Select the destination folder and name the file following this rule:

  • ACT2 T1-1 12.YYYY-1 export.csv   (data to pre-load 03.YYY)
  • ACT1-TAX T1-1 03.YYYY export.csv  (data to pre-load 06.YYY)
  • ACT1-TAX T1-1 06.YYYY export.csv   (data to pre-load 09.YYY)




In order to extract only the Tax rates accounts we must restrict the selection by using filter TXA0015 on account dimension and flow F99.

Files should be saved here in BFC Admin google folders:

https://drive.google.com/drive/folders/1bCP53W8tgw1KP2LVrXtf0k3LSbpq4nye

Check the Export Status and Finish.


Exported files should be saved here in BFC Admin google folders:

https://drive.google.com/drive/folders/1bCP53W8tgw1KP2LVrXtf0k3LSbpq4nye


2.1.4.2 Prepare the import file

From the export file do a Save as to a new file and name it following this rule:

  • ACT1-Tax YYYY.03 - T1-1 import.csv
  • ACT1-Tax YYYY.06 - T1-1 import.csv
  • ACT1-Tax YYYY.09 - T1-1 import.csv



In the new import file we need to REPLACE:

  • dimension CA "ACTUAL2" by "ACTUAL1-TAX"
  • both dimensions DP and PE with the period we want to import.






To avoid data rejection in the import we also need to format cells of columns D_RU and D_ORU as Custom / Type "00000".


Files ready to be imported should be saved here in BFC Admin google folders:

https://drive.google.com/drive/folders/1bCP53W8tgw1KP2LVrXtf0k3LSbpq4nye







2.1.4.3 Import the file

In Package Manager open File menu and select Import.










Select Replace


Indicate the path to the file to be imported 



Check the data to be imported in Preview mode


DO NOT select checkbox Publication and select Import.



Check the import Status and Finish.


Package Status should be Modified 


2.1.5  Communication End users and GAR process owner

Once all packages have been generated, pre-loaded and status checked an email should be sent to GAR Tax Reporting Manager informing that Tax packages are available. 



In BFC web a message on the Homepage should be created 








2.2 Hard Close (HC) Tax opening

Hard Close and Year End are managed under a single category ACTUAL2 and a single December period (yyyy.12).


2.2.1 Pre-load of package data

2.2.1.1 Export ACTUAL2 YYYY.09 packs (P&L and Tax rates)

  • Export massively the ACTUAL2 YYYY.09 packs for IG & IP companies* filtering on P&L and tax accounts (“Accounts” filter to be used: HC-PLTX - see content).


  • File exported should be named as 09.YYYY ACT2 export.txt and saved in this folder: 

https://drive.google.com/drive/folders/1nsMddg06K3TwHB2L0IAY6VNR9y9a_CCD



2.2.1.2 Convert the exported file into the HC tax import file

From the exported file a new file must be created by save as and named as 12.YYYY ACT2 HC import.csv.

In this new file we need to clean/change some data as follow:

  • Remove all lines for entities expected to leave the consolidation scope between October and Year End - list of companies to be confirmed from GAR team.
  • Remove all lines where D_FL column are not F99; F99AJ; F99EX
  • Remove all lines where T1 column is not empty
  • Remove all lines where D_MARK and D_PMARK columns are not empty
  • Remove all lines where D_PAYS column is not empty
  • Remove all lines where D_MVTCA column is not empty
  • Remove all lines where D_ZADM column is not empty
  • Replace YYYY.09 by YYYY.12 in columns D_DP and D_PE
  • Formatting of columns D_RU and D_ORU must be with 5 digits (to keep company codes under 5 digits and not to miss the “0”). Format cells of columns D_RU and D_ORU as Custom / Type "00000".

The import file should also be saved in this folder:

https://drive.google.com/drive/folders/1nsMddg06K3TwHB2L0IAY6VNR9y9a_CCD

2.2.1.3 Open ACTUAL2 YYYY.12 reporting period

Choose set of folders and controls applicable for HC Tax - refer to this document "BFC Admin Reporting set up per category and period"

Adapt the deadline for submission according to date defined in the Finance Accounting Closing Calendar available in the GAR AODOCs Library


2.2.1.4 Insert Reporting Units and generate the packages

Select the reporting units from ACTUAL2 September (yyyy.09) excluding:

  •  the MEQ (Equity method companies) excluded from Tax reporting
  • entities expected to leave the consolidation scope between October and Year End - list of companies to be confirmed from GAR team.


Copy through the icon  or Ctrl+C:


Paste through the icon  or Ctrl+V:


2.2.1.5 Import the 12.YYYY ACT2 HC import.csv file

Consult and check the type of rejected data - Should be only calculated data


2.2.1.6 Final checks on the data imported

2.2.1.6.1 Massive Controls through Excel retrieves

In order to ensure that the data imported is correct BFC Admin must run the following Excel/BFC retrieval file which is comparing P&L and Tax rates in both ACTUAL2 packages: 09 and 12 periods

If there are companies leaving or entering the scope since the last time excel file was updated, the following adjustments must be done in the Excel / BFC file:

  • In tabs YYYY.12 TXxx HC F99 / YYYY.12 TXxx HC F00 / YYYY.12 ETxx HC F99 remove/add the lines for the reporting units that have left/entered the scope.
  • In tab P&L HC, column CHECK should only show differences in case there are companies that have left the scope between HC and YE. In this case, add more columns to retrieve 09.YYYY data for the companies that have left and confirm the difference in column CHECK is  equal to the total of companies leaving the scope. 

Companies entering or leaving the Solvay Group are registered in the following file Solvay Structure file available in GAR AODOC Library.

Link to the Excel/BFC retrieval file stored in BFC Admin google folders:

https://docs.google.com/spreadsheets/d/1oW1NiskiqqzItybbcWmzLNS5qW7lULHP/edit?usp=sharing&ouid=101127428078004514097&rtpof=true&sd=true

Tax rates check (tabs YYYY.12 TXxx HC F99 / YYYY.12 TXxx HC F00 / YYYY.12 ETxx HC F99)


P&L check ( tab P&L HC):


2.2.1.6.2 Selected controls directly in packages

Controls to be made consulting directly packages of the most significant companies:

  • 00001 Solvay SA
  • 04274 Rh Operations
  • 57230 Solvay France

Open the related packages and consult P&L L2018 and each tax schedule to check that:

  • Schedule T1-1 "tax rates" is filled with data and other tax schedules are empty and ready for input;
  • P&L schedule L2018 to check that data is filled



2.2.2 Creation of Consolidation definition 

  • The consolidation definition for HC Tax should be created by a save as of ACTUAL2 09.yyyy / Variant 2.
  • Scope and exchange rates from period yyyy.09 should be kept as latest known when HC Tax starts.

2.2.2.1 Consolidation automatic run

There is a task created to run HC consolidation - ACT2-HC - that needs to be updated.






Definition - needs to be changed for current year 12.YYYY HC 

Task period of validity:  period of run to be validated with gar tax reporting manager



2.2.3 Communication End users and GAR process owner

A global message has be set up to be displayed in WEB BFC_Prod Homepage letting BFC users know that HC Tax packages are already available.













An email has be sent to the Tax Reporting manager in GAR informing that packages have been generated, conso definition and related schedulings created.













 2.3 Switch from Hard Close to Year End 

2.3.1 Back up of Hard Close Consolidated data

After last run of Hard Close (ACTUAL2 YYYY.12 variant 2) done by GAR Tax Reporting manager (expected to be between Dec 10th and 15th), BFC Admin team save the last run under a variant 1 and lock it.





Control in Excel/BFC retrieves that P&L Conso Group Net Result variant 1 = variant 2  - link to the Control file located in BFC Admin google folders : Excel/BFC Retrieve Control back up Variant1





2.3.2 1st massive export of ACTUAL2 YYYY.12 packs reported during Hard Close process

BFC Admin exports massively (without any restriction on accounts, flows, etc) all the reported packs under a flat file (csv or txt)

File exported should be named as Backup ACT2-YYYY.12-HC-export.txt and saved in this folder: 

https://drive.google.com/drive/folders/1xDLIoXicMY1eR4oZSjmBcjmOteXpM6gx

2.3.3 2nd massive export of ACTUAL2 YYYY.12 packs filtering on Rxxx headings

BFC Admin exports massively all the reported packs (filtered by R* Headings) under a flat file

Notes

  • csv should be the format to avoid splitting a comment in separate columns in case there are commas in the text/comment 

Open the file in csv format to confirm all is OK (no empty or broken lines).


File exported should be named as  ACT2-YYYY.12-HC P&L export.csv and saved in this folder: 

https://drive.google.com/drive/folders/1xDLIoXicMY1eR4oZSjmBcjmOteXpM6gx

2.3.4 Create the massive Import file with purpose of cleaning L2018 (P&L headings) schedule

BFC Admin to save the 2nd massive Export under a new document “Import file” named ACT2-YYYY.12-HC P&L import.csv. 

Cleaning to be done:

Remove all lines with flow (D_FL column) F00 and C01

Why ?

-F00 is the opening generated by BFC  - can not be imported

Keep flow F99AJ even if it is expected to be rejected during import as calculated data

Why to keep ? to avoid too many deletion of lines

Keep lines with partner (T1) S9999 , even if expected to be rejected during import as calculated data

Why to keep ? to avoid too many deletion of lines

Keep  lines with flow F99EX (even if some of them will be rejected during import as calculated by BFC)

Why to keep ? not easy to guess which ones to be kept or removed - safer to keep all

Check that detailed analysis dimension such as SITES / PAYS / MARK / CGU/ T2 / YEAR…) are empty


Replace for all remaining lines amounts (P_AMOUNTS column)  by 0

This is the way to set the P&L to 0 and to erase the HC P&L

Replace for all remaining lines comments (P_COMMENTS column) by empty cells

This is the way to erase the HC P&L comments

Save and close the file.

Warning: check that coding of companies kept with 5 digits (example: company SSA is coded “00001” and not transformed to “1”



2.3.5 Unlock massively the existing ACTUAL2 YYYY.12 packages 

Packages need to be unlocked to allow the massive import.



2.3.6 Import massively the “Import file” (from Step 2.3.4) to clean both P&L HC data and comments

Key points on Import options to be selected:

  • Choose replace data (and not aggregate data)
  • Choose “Yes, also import empty rows” 
  • Import comments (to erase HC comments with empty cells)
  • Do not reset to 0 the pack before import ! (not to erase Tax schedules)
  • Activate the “run package rules” after import to get a saving of the packs and thus a saving of the P&L cleaning ! Only way to massively check that P&L cleaned using Excel/BFC retrieves.
  • Do not activate the “Run controls” after import : by definition a lot of blocking controls would appear that could confuse the user opening beginning of January their YE pack








Download the Rejected data file and check that root cause if justified (calculated amounts, data not opened to import)

Expected rejected data are calculated data:

  • F99AJ
  • F99EX / D_TO=ORIG07-02
  • F99 / D_T1=99999




File with rejected data should be saved in this folder: 

https://drive.google.com/drive/folders/1xDLIoXicMY1eR4oZSjmBcjmOteXpM6gx



2.3.7 Control that P&L set to 0 and that HC data still there in Tax schedules

2.3.7.1 Massive Controls through Excel/BFC retrieves

Objective of the check in Excel done on the full scope of companies but using PACK amounts - link to the file Tax Reporting Move HC to YE - Check P&L and Tax rates:

  • P&L accounts should all be at 0
  • Tax rates should be still there

If there are companies leaving or entering the scope since the last time excel file was updated, the following adjustment must be done in the Excel / BFC file:

  • In tabs Tax rates F99 & Tax rates F00 remove/add the lines for the reporting units that have left/entered the scope.

Companies entering or leaving the Solvay Group are registered in the following file Solvay Structure file available in GAR AODOC Library.


1) Check on P&L (tab P&L F99 F99EX F99AJ):


2) Check on Tax accounts (tabs Tax rates F99 & Tax rates F00):

2.3.7.2 Selected controls directly in packages

Controls to be made by opening the most significant companies:

  • 00001 Solvay SA
  • 04274 Rh Operations
  • 57230 Solvay France

Open the related package and consult each tax schedule to check that Hard close data and comments are still there / consult P&L schedule L2018 to check that no data and no comment: status OK / NOK

Example, T3-3 Current income tax:


P&L (schedule L2018):


2.3.8 Switch set of folders and controls from HC to Year End ones 

In the following table ( (refer to this document "BFC Admin Reporting set up per category and period") are defined the Folders and Set of Controls to be used for each type of company in each Category and reporting period (monthly, Quarterly, Hard Close, Year-End):














Adapt the deadline according to date defined for package publication in the Package Generation Planning file.


2.3.9 Publication and unlocking of packages

In order to clean the data at conso level the packages that have just been cleaned with the mass import must be published.

Publication has to be done by special permission since packages are not valid. 





Once packages have been published, 12.YYYY conso SOLVAY14 / V2 needs to be run to clean data at conso level. 


2.3.10 Change package status to Modified



2.3.11 Add and create the MEQ (equity methods) packs

Adapt set of Folders and controls (refer to this document "BFC Admin Reporting set up per category and period") of Equity Methods (different from IG and IP companies) to Year End profile . Exception for company 66263 Hindustan Gum.


2.3.12 Create packages for companies entering in the conso scope

Check also the list of IG / IP / MEQ versus November ACTUAL2 reporting one (in case companies have entered in the scope in November, after the launch of HC Tax).

Companies entering or leaving the Solvay Group are registered in the following file Solvay Structure.

2.3.13 Generate all packages and final control

Check that package status is:

  • “Integrated” and “Unlocked” for IG and IP without P&L
  •  “Modified” for IG and IP which took part to HC Tax process (consequence of the Import cleaning)
  • “Empty” for MEQ and new added companies



Open the following packages (without any action or saving inside !) to check that F00 there in L7010 / Year end schedules there / P&L schedule L2018 with 0 data / Tax schedules still with data (IG and IP used during Hard close):

  • IG 04274 Rh Operations
  • MEQ 00134 Solvay Peroxidos


L7010/F00:



Year end schedules:










2.2.14 Communication End users and GAR process owner

A global message has be set up to be displayed in WEB BFC_Prod Homepage letting BFC users know that Year End Tax packages are already available.
















An email has be sent to the GAR tax reporting manager (copy to GAR Conso team)  informing that Back up of Hard Close tax data done.


END OF THIS PROCEDURE