High level: EU VAT system

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A high level overview is provided of the EU VAT system: what is subject to VAT and the right and methods of VAT recoverability. It includes also a comparison with the US Sales and Use Taxes system.

Gain awareness and acceptance

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Create, protect and prove value and write a business case for investment to realize business objectives such as improve cash flow, reduce costs, improve tax processes and manage tax related risks.

SAP End-to End solution for periodic SII files in Spain

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In Spain a new VAT reporting system will enter into force on the 1st of July 2017.

Italy - Quarterly informative report VAT invoices data

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The Italian authorities passed a series of measures aimed at detecting and combating tax fraud: "Quarterly informative report VAT invoices data". The aim is to get close to real-time information of company transactions, which will allow the tax authorities to perform a more efficient tax audit and reduce processing time. Companies face business challenges to implement these new requirements.

Towards a new and definitive VAT system for the EU

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The Commission adopts new proposals for the most far-reaching VAT reform in the EU for a quarter of a century VAT is a major and growing source of revenue in the EU, raising over €1 trillion in 2015, corresponding to 7% of EU GDP. However, despite many reforms, the VAT system has been unable to keep pace with the challenges of today's global, digital and mobile economy. The current VAT system dates from 1993 and was intended to be a transitional system.

When expertise is needed upfront

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The tax function should ascertain proper implementation and determine the impact of changes in businesses, laws and regulations on implemented tax planning. Getting ahead of possible problems at the planning stage before they arise in practice is one critical way to make sure that the company reaps the benefits. When the business model changed as a result of the implementation of a centralized procurement model, this could create not only VAT risks, but commercial risks as well. 

VAT and shared service centers

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Take a Shared Service Center. In the past local country teams were handling VAT matters and its department who had been there for a long period of time, had access to talented staff, and were well trained and also employee turnover was low. Under a Finance transformation all of their responsibilities are often moved to a far away location and new process owners who do not know the company's historical background and employee turn over is high. The local staff are often made redundant. Can you predict the risks?

Manage business model change

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There is one common denominator that is too often missing from the strategic or planning elements of a business model change — indirect tax. But do these taxes get the attention they need, especially in light of increasingly complicated and globalized business models?

Higher on the CFO's agenda

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The importance of indirect tax has increased over the last couple of years. While the rates for direct tax, corporate income tax, are decreasing, the rates for indirect tax keep rising. Time for Richard Cornelisse, editor of Global Indirect Tax Management, to act on that: ‘At multinational companies we’re easily talking about amounts of over 5 billion euros of indirect tax flowing through the books. Yet according to big4 surveys, the related control mechanisms are still inadequate. Not only can an error in the accounts lead to major additional tax assessments and substantial penalties, with amounts like these, it can be devastating for the reputation of a listed company.’

VAT function effectiveness

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A key business objective in today’s complex regulatory environment is the promotion of shareholder confidence in a company’s financial statements. Finance functions of major multinationals operate within a corporate culture that places increasing emphasis on the core values of trust and integrity. Within this culture the overriding strategic imperative of many CFOs is to manage their company’s financial reporting obligations and avoid reputational risk.

SAF-T Poland per 1st July 2018 extended to taxpayers with more than 9 employees or 2 million EUR sales revenue

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Filing SAF-T will be mandatory for large taxpayers: employ more than 250 people or 50 million EUR sales revenue irrespective of whether they are established in Poland or not. Per 1st July 2018 this extended to taxpayers with more than 9 employees or 2 million EUR sales revenue. In order to be able to comply with the requirements and provide the XML file on request in time, tooling needs either to be developed or purchased. 

The ways to measure VAT performance

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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.

Concrete measurable actions

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Setting realistic objectives is the starting point for any successful change effort. In order to increase indirect tax function effectiveness it is important to set S.M.A.R.T. objectives and define tasks: add to objective the word by ... as shown in below example. Break down larger tasks into smaller ones. 

Enablers of the tax function

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For a tax function to produce timely deliverables and satisfying the requirements of the board and other stakeholders, the effectiveness of tax department’s 'governance', 'operation' and 'infrastructure' are essential enablers. This article sets out the business challenges and areas of improvement for these enablers.

Publish your tax strategy: guidance

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Behaviours and behavioural change for large corporates in particular in the UK via publising a company's tax strategy. HMRC provides guidance.