Once a commercial and tax-efficient structure is determined—one that addresses both historical and potential risk—it is time to take the theory behind the structure into the realm of practice.
- Who is taking care of filing VAT registrations?
- When should you apply for VAT registration, since average lead times in jurisdictions can be several months?
- Who is responsible for maintaining a structure and making sure the business is acting in accordance with the model?
- How is this communicated throughout the organization?
- How will ongoing monitoring be handled?
Most ERP systems, including SAP, Oracle, JD Edwards, and Peoplesoft, are equipped with some form or forms of VAT functionality. However, they typically still require significant configuration and may need to be customized to deal properly with indirect taxes.
They will also need to be updated and tested to reflect new contracts and billing flows. Ownership of these tasks must be determined and communicated up front, so that the ERP system can accurately issue invoices from day one.