Where you are and where you want to go

Benchmark information, templates, modules and approaches are shared to support VAT process improvements and meet business objectives

The global tax environment is changing rapidly. How do you anticipate, prepare for and manage these changes? The thought leadership publications on the GITM website could support but also challenge you. You will get access to new views, templates and methods to translate your indirect tax knowledge into workable business processes. In addition, senior management has often competing priorities and indirect tax not always rank high on their priority list. How do you achieve a turnaround and realize their buy-in?

We share our views and best practices.

'Why', 'What', and 'How' of Managing an Effective Indirect Tax function:

• A roadmap to indirect tax function effectiveness:
  • Why is management necessary and what needs to be done?
  • How to realize objectives via best practice approaches, tools and methodology
  • How to increase indirect tax function effectiveness
  • Realizing senior management buy-in
  • Writing a business case, problem statement and calculate Return on Investment
• Where you are and where you want to go
• Planning of non-routine transactions
• Indirect tax strategic plan
• Tax control framework
• Risk management
• Data and technology including VAT and SAP
• Reporting
• Fraud
• Training
• EU developments

Our forum and blogspot contain the latest tax news.

VAT control framework

Effectiveness and efficiency of operations, the reliability of tax reporting, and compliance with applicable laws and regulation

A Tax Control Framework (TCF) is an internal control instrument specifically aimed at the tax function within a company and an integral component of a company’s business control framework, which is different for every organization. It is a system (process) to identify, mitigate, control and report tax risks.

The ultimate objective of a TCF is to be in compliance with tax laws and reporting requirements and manage the risks that exceed the companies' risk appetite.

A TCF should prevent tax errors, identify opportunities in a timely manner and perform correct filings at the right moment. A company's VAT control framework system is adequate if it provides insight into where material VAT risks may arise in the company (awareness), while the degree of risk tolerance is established internally and where appropriate control measures are taken with respect to these risks.

• Review the categories of VAT risk the company is facing as well as the likelihood of occurrence, its potential impact and mitigation measures
• Review the company's risk appetite and risk tolerance and the way in which risks is measured

A TCF requires a clear understanding of: the companies' material risk areas, the company's tax policy derived from business objectives, the VAT processes and risk based control measures (hard and soft controls) and roles and responsibilities of the indirect tax department and its shadow tax function.

Written by Richard Cornelisse, one of the articles published on Global Indirect Tax Management

Infrastructure - challenges and improvements

It is important that hard copies and electronic corporate documents, tax files, and tax records are organized and retained and accessible and for example not stored on employees’ hard drives. Besides easily accessible it should be backed up under company’s IT policy. Tax audit adjustments including settlements are documented and archived for future use.

When no documentation exists for critical tax processes tax authorities or corporate record retention requirements have not been considered it is important to set up a process for documentation. This process should be reviewed frequently and has to be updated for changes in operating environment.

Effectiveness of the tax department could be improved when the tax department has adequate supporting technology and tools and/or systems that don not need significant manual input. Tools and technologies are used in an integrated manner and tax data is only collected once and reused.

The indirect tax department formally engages with key stakeholders on a regular basis to exchange knowledge and such contribution are supported by technology.

ERP and other systems are properly configured for VAT to support compliance, financial reporting and planning and there is dedicated IT support for tax.

The tax department has access to critical systems and applications and the right VAT configuration is implemented and maintained accordingly moving forward.

A substantial improvement is available if technology tools and systems to increase effectiveness and reduce risks could replace spreadsheets.

Systems and processes should also be in place to maintain critical data needed for tax and strategic decisions on a periodical basis considering reporting, compliance, auditing and planning needs.

Written by Richard Cornelisse, one of the articles published on Global Indirect Tax Management