In Part I of our series on the VAT Evolution, we explored the motivations of tax authorities and governments around the world to embrace digitization and technology of a method of increasing revenue collection and shrinking tax gaps. Then in Part II, Three Focus Areas for VAT we discussed some of the priority concerns for regulatory thoughts. In our final entry in this series, we are going to talk technology and why IT leaders are looking to move away from local point solutions to a global approach to managing VAT.
When managing VAT, local expertise is essential, but how does that expertise scale across borders? This is a concern of both tax and IT leaders alike. In our IDC sponsored report, Taming the Value-Added Tax Beast with Technology we cover this topic in-depth. You can download your free copy here.
The role of IT in tax is to enable VAT experts, through technology, to collect and remit tax appropriately with the capability to create and submit detailed reports upon request. Therefore, when IT is involved in the selection of technology, they are looking for several specific criteria. Here are the top three:
- Creating a positive user experience – Tax and finance managers currently have a difficult time managing and analyzing data from multiple sources to ensure accurate and compliant reporting necessitating a higher level of involvement from IT. This creates a cost center that IT is looking to shrink and eliminate where possible.
- Data Security – Security has become a multifaceted issue because of the amount of sensitive data being stored and shared with vendors and tax authorities through varying delivery channels. Keeping this information safe is always the top priority.
- Scalability/Flexibility – As a company grows, tax compliance technology needs to be able to scale across multiple countries, regions and regulatory standards. Avoiding multiple point solutions is the goal of many IT leaders as it impacts the ability to produce a single view of your compliance posture.
Ensuring your technology provider has the capabilities to meet all the needs of your organization is important to confirm upfront. Taking the time to evaluate both current and future needs is critical before implementing new technology.
For more information on the VAT evolution and how your organization can best manage the complexity, download our IDC sponsored report, Taming the Value-Added Tax Beast with Technology and then take the time to talk with our experts.
Learn more about Global VAT Solutions from Sovos