As discussed in three key reasons to appoint a VAT managed service provider, the VAT compliance demands from tax authorities around the world continue to increase. They are only going to become more onerous to boost economic efficiency, combat fraud and reduce VAT gaps. The demands for more granular tax reporting are increasing for this to be in real-time. This includes Spain, Hungary, Italy, Turkey and Mexico. These growing demands are adding to the many other challenges faced by multinational companies today. This is why more companies are looking to managed service providers (MSPs). MSPs can ease the pain points of today’s VAT compliance obligations. They make sure they’re covered for fast approaching mandates looming on the horizon.
But how do you choose the right VAT compliance MSP? With so many providers offering a range of different services, making the right choice can be daunting. Do you choose localised individual solutions or opt for a central approach? Here are seven key areas you’ll want to evaluate:
1. Technical expertise
You’ll want to take a strategic view of your IT environment and map tech investments to business goals. Using an VAT compliance MSP allows you to leverage their investment in software and in the ongoing training of their staff. They’ll have been doing this for many years for many clients. It’s what they do. It’ll also allow you to automate and streamline many of your manual processes which may also be a core business objective. Make sure the software is compatible and accessible to suit your needs in each of the locations where you trade not only today but in the regions you’re looking to enter in the future.
The move to digitise tax reporting all over the world has now led to IT security considerations being important when choosing any provider. Security can therefore relate not only to the transmission of data to a provider, but also in making sure it’s safely and securely stored during, and after transmission to revenue authorities. Here a centralised provider can provide some key benefits. Portals can be used to accept data from clients, and also all information can be securely stored on a consolidated cloud, with data centres in different regions as needed to comply with data retention policies globally.
3. VAT expertise
Building and maintaining a team of specialists can be time consuming and costly. With the right VAT compliance MSP, you’ll have access to their team and can benefit from their specialist knowledge and experience. Let them ease the burden. Know they’ve got their finger on the pulse of regulatory changes so you don’t have to. You can then focus on what your company does best knowing that your VAT compliance is in safe hands.
You’ll want to choose a provider that can adapt as your business needs change. You may want the flexibility to outsource only part of your tax compliance obligations depending on inhouse resources, budgets, expertise etc but have the freedom to assess and change this at any time. A tailored approach that can be altered over time will ensure your compliance needs are covered today as well as in the future.
Hand in hand with flexibility, you’ll want a provider that’s able to grow with you. They’ll already have experience and in-depth knowledge of the markets you need help with today, but make sure they can cover other regions you may choose to enter in the future. Choosing local point solution providers for different markets can cause headaches down the line.
6. Dedicated account team
Your MSP is there to support and service your account and should feel like an extension of your own team. You’ll want a collaborative approach and partnership-feel. Ensure you get the most out of this relationship. Also be updated on new changes in the regulatory landscape well before they’re finalised. Find out about who your account team will be and if they’re in single or multiple locations in addition to if there are any language barriers.
Even though you’ve outsourced all or part of your VAT compliance, you’ll still want to keep track of it. To that end, check what access you’ll have to the software and who in your company will have full or partial access. Also ask if logins are restricted. A secure customer portal and centralized dashboard helps keep track, at a glance, of each stage of your tax compliance. This includes traffic lights to flag priorities and approaching deadlines.
Choosing to appoint a MSP for your VAT compliance will allow you to focus on what you do best. Take care to ensure your chosen provider not only suits your needs today but also has reach and experience in the regions you’ll enter in the future. Taking time to choose the right MSP will pay dividends in the future. The right partner will be at your side for the long haul.
To learn more about the benefits a managed service provider can offer to ease your VAT compliance burden, watch our recent webinar on demand VAT Reporting: Managing Change.