How to Build a Corporate Tax Strategy and an Effective Indirect Tax Function

INDIRECT TAX · OPERATING MODEL

By Richard Cornelisse  · Last updated June 2026

What is the indirect tax function?

What does the current “as-is” indirect tax function look like?

In most organisations the indirect tax specialist sits at the centre and reacts to queries, which leaves local VAT risk poorly tracked across the enterprise.

A recurring characteristic of organisations with an elevated risk profile is the absence of a clear strategy for managing both the technical and the operational risks associated with indirect taxes. Most major multinationals employ one or more VAT specialists within the tax function, yet the way that expertise is deployed tends to mirror the traditional consulting model: the specialist adviser occupies a central position and responds to individual queries raised by logistics managers, accounting staff and local business units.

This role is largely reactive. It depends on colleagues with an operational or local-market focus to recognize potential areas of indirect tax risk and refer them to the tax department for review. As a result, central visibility of the VAT compliance issues affecting local operations is patchy at best, and there is little continuity in the management of local VAT risk across the enterprise. A further limitation is that the in-house VAT adviser typically concentrates on technical questions of strict VAT liability rather than on the operational issues that affect the integrity of transactional reporting. A growing number of in-house VAT managers now face the challenge of building an indirect tax strategy that is more closely aligned with the business objective of operational integrity.

Why is end-to-end VAT accounting often nobody’s responsibility?

Ownership is split between finance and IT, so VAT-critical controls fall through the gaps.

In most organisations, no single person or department owns the end-to-end VAT accounting process. The finance department generally holds overall responsibility for the sales and purchase processes, but the application architecture underpinning those processes is configured and maintained by IT. The control environment surrounding manual intervention in accounts payable and receivable remains with finance, and VAT-critical processes — purchase-order creation, invoice verification and the selection of accounts-payable tax codes — are often subject to limited or inappropriate controls, while the internal VAT function stays focused on ad hoc advisory support to local business units. Despite the potential impact of VAT errors on the audited accounts, the financial-reporting responsibilities of the in-house VAT specialist tend to extend no further than VAT returns and associated filings such as EC Sales Lists, annual sales listings, and Intrastat.

How has the indirect tax profession changed over the years?

For a long time indirect tax was an individual sport; market and client changes have turned it into a team sport.

For a long time, the indirect tax profession was an individual sport. Driven by changes in the tax market and in client needs, it has evolved into something much closer to a team sport. The two shifts below — from the adviser’s side and the client’s side — explain why.

What changed from the adviser’s perspective?

Twenty years ago, indirect tax specialists were scarce, dedicated in-house indirect tax functions were almost unheard of, and content that is now freely available on the internet could still be sold. As the saying goes, 

“in the land of the blind, the one-eyed man is king.”

An adviser could work reactively, much like a doctor seeing patients in a waiting room: diagnose, identify the problem and prescribe a remedy. The profession — buyers and sellers of advice alike — was far more product-focused, and many firms sold VAT content-based know-how. The system was closed: only a few organisations had access to specific content, often gathered through their worldwide networks, so that content carried real market value.

The system then shifted from closed to open as search engines took hold and more people began to contribute and share. Information can now be posted, forwarded and found within seconds, free of charge and available around the clock. A simple test makes the point: think back five or ten years to the basic content clients once paid for, then enter the same question into a search engine — the answer is almost certainly already there. Prices fall and the life cycle of that paid product ends, because anyone can find the information themselves. From a pricing perspective, resources such as AI, Google and Wikipedia have made a great deal of content far less valuable, if not worthless. Meanwhile, higher salaries have pushed up charge-out rates, and a higher bill brings higher client expectations, so advisers must now deliver greater quality and practicality.

What changed from the client’s perspective?

Alongside the introduction of anti-abuse legislation, clients’ needs and expectations have changed considerably. Today’s clients have, in effect, become their own doctors, establishing in-house indirect tax functions to manage their obligations more effectively, while tax-industry networks and social media spread tax knowledge more widely than ever. Several forces drive this shift: globalisation pushes businesses to compete internationally with more sophisticated tax strategies; advances in tax technology make processes and data management more efficient; high-profile events such as the global credit crisis and the Enron scandal heightened demand for accountability; tax authorities have intensified scrutiny through requirements such as the standard audit file for tax purposes; and the global landscape continues to change through initiatives such as Country-by-Country Reporting, the OECD’s Base Erosion and Profit Shifting (BEPS) project and the automatic exchange of information between jurisdictions. Together these developments have pushed both external advisers and in-house functions toward a far more proactive approach.

What skills does a modern indirect tax adviser need?

Technical tax knowledge is now the baseline; data, technology, process control and soft skills are the differentiators.

Because of these changes, technical tax expertise has become a baseline expectation rather than a differentiator. Increasingly, it is data analytics, IT and accounting capabilities — together with the adviser’s soft skills — that set practitioners apart. Technical advice must now be embedded in systems, processes and controls; instructions have to be given to people outside the tax function; and data must be analysed efficiently to anticipate the future, not only measure the past. Alignment with the business is essential if the tax function is to plan in good time and avoid perpetual firefighting. Beyond excellent technical skills, an adviser needs communication and collaboration, analytical and critical thinking, project and change management, information technology, negotiation and leadership.

Why should indirect tax be a team sport, not an individual one?

No one can excel at every area of global indirect tax, so combined team strength is what raises quality.

The profession has been an individual sport for a very long time, still defined largely by individual technical strength and personal experience, with the next generation typically trained by that same individual. In my view, the indirect tax professional of the future must take a different approach, for a simple reason: it is no longer possible to excel at everything in global indirect tax management. Individuals can excel in particular areas, and it is the combined effort of the team that ultimately makes the difference in quality. As I like to put it, 

“one man’s weakness is another man’s strength, so let’s team up.”

How can organisations close the gap between current capabilities and future needs?

Give indirect tax the right people, the right roles and CFO-level visibility — it is consistently undersized versus direct tax.

The indirect tax function often recognises that it is understaffed and constrained by a limited budget, which hampers its ability to perform optimally, yet it struggles to communicate this clearly and to have it prioritised on the CFO’s agenda. As a result, specialised fiscal knowledge is deployed mainly in support of direct tax. To succeed, the indirect tax department needs an appropriate number of people equipped with the right skills and capabilities. Surveys consistently indicate that indirect tax teams are undersized relative to their direct tax counterparts, which tend to have more staff and to be positioned more effectively within the organisation. Closer collaboration between the Head of Tax and the indirect tax function can raise the profile of indirect tax within the CFO’s remit. Achieving these objectives also requires assessing the further factors that determine whether the goals can realistically be met.