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When high risk indirect tax areas and lowest performing VAT processes - that have a direct impact on the company's VAT objectives - have been identified, the next step is to measure the performance in term of effectiveness and efficiency of each of these processes. Measure the magnitude of that problem, determine why the problem exists, and generate a set of solutions to ensure that the problem goes away.

The first phase is however a zero measurement that identifies key indirect tax risks and worst performing processes that in the end should be improved. Verify indirect tax performance could be done via:


  1. VAT throughput
  2. Statistical sampling
  3. Data analysis
  4. ERP review

Normative VAT Control Framework


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VAT control framework After the zero measurement, a toolkit should enable to assess and evaluate the effectiveness and efficiency of a company's current control framework. A normative VAT Control Framework is used as a yardstick for comparison purposes and will indicate how the steps should be taken in an ideal world (gap analysis).


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VAT risk VAT controls Benchmark kopie


HMRC International Benchmarking report 2011


Benchmark  – Cost and Effectiveness of GST/VAT Risk Assessment



In order to get buy-in from senior management it is often about setting the right priorities, understanding the root cause of underperforming and select a method for measurement that best fits.

The deck explains what a tax function could do to get indirect tax higher on the priority list of senior management.



Written by Richard Cornelisse
 Richard LinkedIn

Richard advises multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework.

He started his career as a manager at Arthur Andersen and then became a partner in EY where I led the indirect tax performance team for Netherlands and Belgium. Currently he is a senior managing director of Key Group.

Richard has over 20 years’ experience advising clients on international VAT issues. He is specialized in the tax aspects of financial transformations, shared service centre migration, and post merger integration work. Richard is also somewhat of a mentor, giving back to the profession. If you are interested in conversation and discussion, please feel free to contact him.