Brazil is the world’s ninth largest economy and a country with a well-earned reputation of being perhaps the most complex tax environment on Earth. The sheer number of laws and mandates, the constant change and the risk of non-compliance resulting in significant penalties and fines is omnipresent. In this three-part blog series, we’ll look at the reasons behind the difficulties and explain how organizations are changing their approach to tax in Brazil to reduce their financial risks.
In part I and part II of this series, we examined the root causes of complexity in Brazil and what elements your tax transformation journey needs to include to be successful. In our final installment, we’ll cover how companies can reexamine technology and partnerships to bolster their efforts.
A central part of your business transformation to solving tax is how you think about your technology. The level of complexity in Brazil has made it nearly impossible to manage manually, yet 80% of companies are still looking to manage this process that way, or with limited or disconnected technology products. This is a losing proposition bound to lead to repeated audits and penalties.
Tax has grown beyond the breadth and scope of any one organization to manage on their own. Especially in Brazil. The complexity involved requires a partnership with experts that not only have tax expertise in a particular market but has the wherewithal and competency to understand your business and the nuances involved. Solving tax requires sound technology, but also a detailed understanding of your marketplace and how to navigate regulations and standards that are unique to your products and industries.
Let’s examine how the technology partner – business relationship has evolved in recent years to better align with organizational needs and solve complex problems.
- Segregated tools have been replaced by integrated platforms
- Individual departmental objectives have given way to organizational priorities
- Technology partners selling point solutions have been replaced by partners working with clients to solve business problems
- Localized problems are now looked at through the lens of end-to-end approaches and adding value.
The path forward in Brazil is not just in investing in technology solutions but changing the way you engage with technology partners. You shouldn’t be looking at them as a vendor who can sell you a magic box to solve your tax issues, you should be looking to your technology partners as a company that is on this journey with you, step by step, helping you solve the most complex and challenging problems as they arise.
Sovos recently hosted a webinar featuring João Cavalcanti, Director SAP Partner Solution Center from SAP; Uira Gomes, Global Tax Director from AB InBev and Paulo Castro, Brazil country manager, Sovos. The focus was on how to navigate the most stringent regulatory landscape in the world while undertaking the technology and compliance journey needed to meet the demands of modern tax environments. You can access the full webinar on-demand to hear directly from these experts on strategies, tactics and tools that will set you up for success. I would also encourage you to download the eBook for full explanations of these topic areas.