Why companies need to think globally when it comes to VAT.
VAT complexity is primarily a result of how widespread VAT is and the lack of uniform approaches among member countries. Situations that add to the complexity include:
- VAT returns can differ greatly from country to country.
- Different countries means translation issues abound.
- Different industries can have different requirements.
- The list of eligible transactions/ services is growing rapidly.
We have reached a point in the evolution of VAT compliance where localized point solutions can no longer keep pace with the demands of governments looking to close tax gaps and increase revenues. Attempting to manage the complexity of modern VAT through disparate IT systems creates support and maintenance challenges that are essentially unsolvable.
With the tax gap continuing to increase globally, regulatory authorities have embraced the digitization of tax to increase revenue by eliminating suspicious supply chain activity and VAT fraud. This has provided a greater degree of control in implementing necessary reforms and changes.
Digitization has also lessened the burden on compliance by reducing paper trails through the automation of systems. Perhaps most importantly, it has allowed for the sharing of data between countries for cross-border transactions which has been plagued by inefficiencies and fraud.
This IDC InfoBrief provides in-depth analysis of why businesses need to consolidate and standardize platforms and IT processes to effectively implement compliance processes to create greater agility to capitalize on emerging markets. By having a single source of truth for data and reporting, organizations can better protect themselves against audits, fines and penalties.
Get your complimentary copy of the IDC InfoBrief now to ensure your organization is prepared to respond to the growing complexities of global VAT.