Page 3 of 4: Infrastructure Challenges and Improvements
It is crucial for both hard copy and electronic corporate documents, tax files, and tax records to be well-organized, retained, and easily accessible—preferably not stored on employees’ personal hard drives. In addition to being readily accessible, these documents should be backed up in accordance with the company’s IT policy. Documentation of tax audit adjustments—including settlements—should be properly archived for future reference.
When there is no documentation for critical tax processes, or when tax authorities or corporate record retention requirements have not been addressed, it is vital to establish a structured process for documentation. This process should be regularly reviewed and updated to reflect changes in the operating environment.
The effectiveness of the tax department can be significantly enhanced by utilizing adequate supporting technology and tools that minimize the need for extensive manual input. An integrated approach to technology ensures that tax data is collected only once and reused across various applications. The indirect tax department should engage with key stakeholders consistently to exchange knowledge, and these interactions should be supported by technology.
ERP systems and other relevant platforms must be properly configured for VAT to facilitate compliance, financial reporting, and planning. Additionally, there should be dedicated IT support for tax-related functions. The tax department must have access to critical systems and applications with the correct VAT configurations implemented and maintained moving forward.