How can manufacturers navigate the ever-evolving and increasingly complex world of value added tax (VAT)? There are several, key ways to evaluate your current and future approach to VAT, maintaining compliance the entire way.
1. Ensure alignment between IT and tax teams
Far too often we have seen IT-centric processes miss (or at least misunderstand) key compliance needs and requirements, and tax-centric processes fail to consider the practicalities of automation. Both tax and IT must realise that they will need each other for ongoing maintenance and solution expansion initiatives.
2. Continually establish and evolve processes to share up-to-date compliance documentation
Organisations would be well served to establish and share solid documentation around their compliance protocols and conduct periodic reviews to ensure they are continuing to do what is necessary to minimise audit risk and keep their company safe.
3. Recognise the consequences of non-compliance
There are both tactical and strategic questions at play here, and manufacturers must make thoughtful business decisions around how to handle the level of VAT compliance requirements that their operations demand. Increased audit volume is coming, so the industry has to commit to effectively and efficiently meeting the ever-growing compliance obligations of e-invoicing and periodic reporting.
4. Regularly review your indirect tax strategy
Although you may have an indirect tax strategy in place, make sure to evaluate how effective your current strategy is, especially as requirements are undergoing significant changes in so many jurisdictions. Is your strategy sufficiently up-to-date to ensure it efficiently and accurately addresses current and upcoming compliance obligations and is scalable to seamlessly meet the rapidly evolving needs business will face tomorrow.
5. Use automation and cloud-based solutions
Digital identity verification and transaction management frees your organisation from regulatory friction and our intelligent solutions integrate with your processes to ensure valid and future-proof transactions.
Sovos helps you remain focused on your central business by reducing the friction of complex tax digitisation mandates. We take a future-facing approach to indirect tax compliance with intelligent tools that provide insights for a competitive advantage.
Learn about compliance solutions built for manufacturers!