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Benchmarking exercises against trends in the indirect tax market can be done via global surveys that capture info on tax function, attitudes and priorities. These surveys are useful as they give insight into what others are facing or have faced and how you could improve yourself.

The tax function should be able to understanding business activities/objectives including R&D and get aligned with other functions like legal, HR and IT. The tax objective is to mitigate risk and identifying opportunities to support company's supply chain.


Surveys are alarming


Benchmarking provides objective evidence. It can show whether or not you have achieved your objective set such as a 'mature' tax function' or make visible what needs to be done to make that happen. It might provide the extra arguments to realize change and get buy-in.

 

Benchmark findings

 
  • Senior management and external auditors considering indirect tax not material and a high priority.
 
  • The low risks qualification of indirect tax likely results in budget constraints.
 
  • Lack of specific VAT/GST measurable performance goals visible to the CFO.
 
  • Lack of proper prioritization between lower value activities and higher value activities.
 
  • Indirect Tax function has many competing priorities and insufficient time or resources.
 
  • Historically, the tax function in general focused on other areas, allowing other departments and local offices a free hand to deal with the company's indirect taxes.
 
  • In most companies Finance and Accounting is accountable for indirect tax.
 
  • It seems that the (indirect) tax department is often the last to know what is going on, is forced to be the show stopper when other parts of the business thought they were are ready to ‘go live’.

Written by Richard Cornelisse

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

I started my 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 I am a senior managing director of Key Group.

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