New Global VAT Compliance Report Provides Guidance for Multinationals

Christiaan Van Der Valk
December 10, 2019

Companies are dealing with a fundamental shift in the way they do business with trading partners. In a rapidly increasing number of countries, there’s a third party inserting itself into every transaction. It’s the government, and it’s wedging its way into every order a company ships or receives. 

In an effort to close a massive tax gap and enforce value-added tax (VAT) regulations, tax authorities worldwide are moving to continuous transaction controls (CTCs), including clearance-model electronic invoicing, in which the government actually becomes a real-time third trading partner in business-to-business transactions. What began in Latin America about a decade ago has spread to Europe and is moving into Asia. 

Multinationals are rethinking VAT compliance while migrating ERP

As a result, multinational companies are having to rethink their tax compliance strategies in order not only to avoid fines and penalties in a growing number of countries but also simply to keep doing business in those places. Failure to comply with CTCs can lead to more than just financial punishments; in can sour relationships with customers and suppliers, and even lead to the shuddering of the business in some countries. 

All of this is happening against a backdrop of large companies moving to new enterprise resource planning (ERP) systems with the goal of taking advantage of new technological capabilities on the path to digital transformation. While tax compliance might not seem like a major issue for ERP migration, attempting to cobble together fragmented point solutions across the world to deal with tax mandates can, in fact, halt or even reverse a company’s digital transformation. Multinationals need a centralized, automated tax solution that integrates with ERP. 

Tax compliance has to be at the forefront of ERP migration 

Tax strategy, then, has to be at the forefront of ERP migrations, and managing mandates for electronic invoicing, electronic archiving and tax determination has to be at the forefront of developing a tax strategy. With more and more countries shifting to CTCs to enforce VAT policies, the complexity involved in keeping up with tax mandates worldwide is not only staggeringly challenging, it’s also fraught with risk.

In the 11th edition of “Trends in Continuous Global VAT Compliance,” industry experts explain, with both high-level and extremely granular analyses, how multinationals can manage CTCs and tax compliance without derailing digital transformation. In fact, this comprehensive report, unique in the industry, details how organizations can actually use VAT compliance to accelerate ERP migration and shift to adopting new, data-driven processes. 

The new report provides guidance on dealing with global VAT mandates 

The 2020 report expands on previous efforts by including detailed information about VAT reporting worldwide as well as delving trends in e-invoicing. The report includes:

  • A complete explanation of how the global trend toward continuous transaction controls affects businesses now;
  • Strategic recommendations for protecting and accelerating digital transformation while complying with changing tax mandates;
  • A comprehensive, country-by-country summary of e-invoicing, e-archiving and VAT determination regulations. 

The global move to CTCs shows no signs of slowing. Companies that prepare themselves now to meet the current and forthcoming challenges of VAT compliance will mitigate risk and gain an advantage over competitors that choose to remain behind the curve.

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Author

Christiaan Van Der Valk

Christiaan Van Der Valk is vice president, strategy. Elected a World Economic Forum Global Leader for Tomorrow in 2000, Christiaan is an internationally recognized voice on e-business strategy, law, policy, best practice and commercial issues. Formerly co-founder and president of Trustweaver (acquired by Sovos), Christiaan also holds long-standing leadership roles at the International Chamber of Commerce (ICC) and the European E-invoicing Service Providers Association (EESPA). Over the past 20 years, he has presented at and authored key papers for international meetings at the Organisation for Economic Cooperation and Development (OECD), the Asia Europe Meeting, World Trade Organization and several other UN agencies. Christiaan earned his Master of Laws degree from Erasmus Universiteit Rotterdam.
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