Our VAT specialists will assist you on a wide range services such as Transaction taxes, Customs & Trade, eCommerce, VAT audits and other related activities. Our comprehensive tax advisory service will optimize your tax position and generate value across your operations.


Transaction Taxes

In addition to handling compliance in multiple jurisdictions, businesses are looking at their Indirect Tax position as part of their strategies to generate value across complex operations and supply chains, increase efficiency and contribute to the management of regulatory and enterprise risk. In the current age of automation, there is a need to understand how technology can add value to your business.

With almost 150 countries operating VAT, GST or VAT-type regimes, the management of VAT and other indirect taxes is a compelling issue for any company conducting business across international borders.

As VAT is charged and collected at every stage in the supply chain, failure to understand requirements or to attend to the details can lead to irrecoverable VAT costs. With VAT rates ranging from 5% to 27%, your liability can grow dramatically.


Customs & Trade

With increasing globalization and even eCommerce in the B2C area becoming truly Global, it’s obvious that for multinational companies today, the efficient integration of customs and trade processes is crucial for being successful in their overall business goals, tax planning and supply chain management.

Any shortcomings in an organization’s international trade planning, internal controls and compliance processes may cause it to overpay duties, overlook compliance issues and incur unnecessary costs and penalties.

Governments around the world are expanding their audit efforts to enforce compliance with import and export regulations.


eCommerce

We are your partner when you deal with Indirect Taxes in multiple jurisdictions. We have valuable experience in the greater European area and we also support our clients globally in dealing with VAT/GST and customs aspects of a Global e-commerce marketplace.

The Global VAT and GST compliance market is undergoing several landmark changes:

  1. GST Introduction in India on 1 July 2017;

  2. VAT on e-Services in Russia, New Zealand and Australia in 2017;

  3. UK and German measures against non-EU sellers (with a focus on Chinese sellers) selling via marketplaces such as Amazon without being VAT compliant in 2017;

  4. Changes to EU VAT system for B2C sales of digital services in the EU in 2019;

  5. Extension of VAT MOSS single registration to goods sold by non-EU sellers in 2021.


VAT & GST on Goods

e-Commerce sales of goods and services are rapidly increasing globally. The large marketplaces take away the borders and enable sellers to reach customers everywhere. Examples of clients that we support are:

  • Asian online businesses selling goods into the EU and surrounding markets (e.g. Switzerland and Norway) either directly or via local marketplace (e.g. Amazon FBA)

  • European online businesses selling goods into the Asia Pacific with a focus on the Chinese market reached via local marketplaces (e.g. T-Mall/Alibaba)


VAT & GST on Electronic Services

An increasing number of countries are taxing VAT or GST on electronic services supplied from abroad to consumers. As of 2015 the EU applied the Mini One Stop Shop which enables trader to register in one country and report and remit VAT for the entire EU.

We file EU VAT MOSS returns in various jurisdictions throughout the EU. Also, countries outside the EU have implemented a mechanism to charge VAT, GST or similar transaction taxes on supplies made from other countries to private individuals.

Our expertise contains all sorts of aspects, not only relating to VAT & Customs duties. Here are some examples of the issues we have worked on for our clients:

  • Classification of goods and services

  • Supply chain optimization

  • Customs and trade advisory

  • Duty calculation

  • Delivery terms

  • Product classification and tax rates

  • Certain product labeling requirements (i.e. WEEE and Private Copy Levy)

  • Country specific Food taxes (i.e. Sugar and Chocolate Tax)

  • Invoicing requirements


VAT Audit

We are able to provide VAT audit solutions in an ever-evolving regulatory environment. Our expert team will ensure that your systems, processes and procedures all perform to the highest possible standards. Our expert knowledge is at your disposal to:

  • Identify and manage risks resulting from complex sale and purchase flows

  • Install internal VAT control steps

  • Improve your cash flow

  • Maximize the recovery of your local input VAT

  • Improve VAT processes and procedures

  • Improve the efficiency and effectiveness of your personnel

  • Implement and incorporate automated VAT systems to ensure further benefits


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Take aways 

Formal support and active involvement of senior management

Optimum process improvement or business transformations will not likely be realized by the sum of individual independent efforts.The risk is that individually everybody knows what needs to be done within his or her own area of expertise, but what is lacking is overall direction and thus progress.

Set up a project plan

  • Set up a project charter that will take effect preferable during feasibility but ultimately during design
  • Write a business case and problem statement
  • Define scope of the project
  • Define objectives and goals of the project
  • Involve stakeholders and define priorities
  • Set measurable milestones
  • Ensure that the right sponsors provide buy-in.
  • Identify (project) risks and how to manage them
  • Jointly validate and refine the project plan and develop a roadmap to success
  • Hold regular meeting to track progress of the various work streams

A legislative requirement for large businesses to publish their tax strategy

Although the potential application is just to the UK, you will clearly want to consider being consistent across jurisdictions.

Tax strategy aligned to business objectives

The tax department objectives and strategies are aligned with the company’s business objectives. Updates take place periodically.

Company's tax policy

Without a proper tax policy it depends on your personal influence within your organization to kick-start a change. Often that results in a fragmented approach, as not all stakeholders will be convinced. The outcome is that this will negatively impact defining standardized and global controls.

Developing policies

To ensure that group companies act consistently globally and to ensure that group companies benefit from best practices applied by other group companies, but also to ascertain acquaintence with policies and subsequent appropriate application of tax policies across the group.

Instructions and procedures

Policies, procedures, working instructions and manuals are accessible and distributed to relevant employees.

Tax department upfront involvement

To ascertain input from tax department before transaction, changes in activities, operations, structure and ensuring that unacceptable tax risks will be prevented where possible. Ensure BU's act in line with tax strategy.

From concept through completion and beyond

VAT should be considered in every aspect of the process, from concept through completion and beyond.

Managing by design

Looking at any process or transaction from end to end and factoring in all the requirements and controls essential to designing and optimizing a compliant VAT process.

Global tax environment is in a state of fast change

The key to success in the management is the ability to translate tax knowledge into workable business processes.

Measurement of performance

Identify the lowest performing indirect tax processes that have the most direct impact on the company’s business and tax objectives. These are then targeted for improvement. Generate and select a set of solutions to improve the performance.

Tax Risk Management

The tax department risk management strategy differentiates between strategic, operational, financial and compliance risks and contains detailed action plans for managing these risks. Managing risk is about making decisions at all levels of an organization, to limit the effect and likelihood of threats happening and to increase the effect and likelihood of opportunities.

Implementation of tax planning

Assess that tax advice given is also correctly implemented:

  • Factual pattern has not change
  • Procedures and risk monitoring functions accordingly
  • Configured in system(s) or manual processes
  • etc.


And impact of changes in business, laws and regulations on implemented tax planning.

Quantify tax risks

In order to quickly gain insight into the level of tax risks (i.e. calculation of the potential assessment), statistical sampling can be used. By selecting a few elements (euros), the reliability of the composition of tax items can be determined to a high degree of certainty.

Wrong use of 0% VAT rate: financial impact

If not correct, the tax authorities might seek to recover tax due from this supplier via a levy of a tax assessment. If the applicable VAT rate is 25%, the tax assessment will be 25/125 of the consideration charged. This assessment will be increased with interest and penalties to determine the total tax burden.

Focus on effective solutions

In order to solve a problem, we also have to identify it completely, and not just settle for the most apparent symptom of that problem.

Symptom of a bigger issue or solve the real problem

In order to fix a problem, we have to first understand the root cause thoroughly. We have to accept the possibility that the problem involves far more than what is immediately apparent and will require more work than is estimated at the beginning. 

Analyze defects

Define the causes of defects, measure those defects, and analyze them so that they can be reduced.

Root cause analysis

  • How did the results happen?
  • Why did they happen?
  • What specifically caused them to happen?

Verify the implemented VAT configuration

An ERP review should highlight where the VAT configuration could be improved or if additional control measures should be added to the business’s Tax Control Framework.

VAT / GST under management

In order to get senior management's buy-in for change and accept indirect tax priorities it is important that proper visibility exist of the amount of VAT/GST under management in the key jurisdictions.

Reputational risks

To avoid any reputation damage and negative publicity around taxes, through building a tax control framework.

Keep a logbook – risk register – of all identified inconsistencies

The internal tax function should always have insight into the areas for attention through this logbook. The risk register should contain the following labels: number, name of the risk, risk definition, cause for the risk to occur, risk category and the risk owner.

External audit and internal audit changes to be expected?

  • Apple’s and Coca Cola’s tax assessment might exceed $2,5 bn
  • Material and reputational risk
  • Will ‘tax assurance’ mandatory be reviewed by External Auditors
  • What information will be requested?
  • What will be the impact on Internal Audit?
  • How will review likely take place (e.g. Big Data discussions)
  • What is the overlap with tax authorities tax audit approach?

Internal audit reviews

Ascertain that unacceptable but existing tax risks will be identified.

Efficient and effective at the same time

Do not spend time on further reducing risks that are already at an acceptable level.

Allocate tax resources

Tax department professionals are appointed to support multidisciplinary teams during non routine transactions and or substantial business transactions.

Training of BU's and/or opco's

To ensure that group companies act consistently globally and benefit from best practices applied by other group companies. To create and raise awareness on tax policies, tax risks and changes in laws & regulations.

Size of the tax function

The tax department consists of the right number of tax personnel and the right level of skills and capabilities.

Tax team management

Creating and maintaining an efficient, effective, pro-active, highly skilled tax department identifying opportunities and managing tax risk and thereby creating value

Employee development

To develop and apply a people development, recognition and retention model and to allocate resources in line with employee skills and prioritized business requirements.

Individual career development plans

Individual career development plans created and maintained and career paths for tax professionals to senior roles within and outside tax department encouraged.

Contributing value to internal customers

The added value to involve the tax department is understood by internal customers (e.g. business, legal, procurement, supply chain, etc).

KPIs and measurement

The efficiency and effectiveness of the tax department is periodically measured and compared with financial and operational KPI's. Interaction with the business is evaluated and improvement points are identified and action plans executed.

Measure cost effectiveness

The cost effectiveness of the tax department is periodically measured. Outsourcing is considered as an option for routine work.

Quality review

The quality of the output of the tax department is periodically assessed both internal and by external parties (internal audit / independent testing / external parties).

Tax planning

A systematic approach exists to tax planning using consistently applied criteria and sufficient consideration is given to the extent and type of work carried out by external advisers. Tax planning is applicable to cash flow planning and impact analysis of changes in business and tax laws.

Resources and budget

The resources and budget is aligned with the outcome of the tax risk assessment: tax resources spent most of our time on high risk areas. Ensure that tax department has sufficient resources and budget to fulfill its role and carry out the corresponding responsibilities.

Senior management sponsorship

Lack of support by management means that any improvements in quality are often temporary. The aim is that management will be encouraged not only to support change, but to become actively involved in making it happen.

Responsibility of management

Identify the key processes of their organization, measure their effectiveness and efficiency, and initiate improvement of the worst performing processes.

Prioritization and effective and efficient deployment of resources

In order to allocate resources to risk and cost saving areas that matter, we determine together the level of risk appetite that the company considers (non)acceptable.

Managing risks that exceed the company's  risk appetite

Having defined acceptable levels of risk leads to resources not having to spend time on further reducing risks that are already at an acceptable level.

The eagle eye view

If the startpoint is a zero measurement we could show that this beginning could have an end game: how a tax strategic plan for the short and long term should look like and what needs to be done to get there.

Roles, functions and responsibilities

A split should exist of roles, functions and responsibilities between tax department and the business are well documented in manuals, procedures and working instructions.

A schematic drawing of the functions of a multinational

A typical multinational today might look like a Rube Goldberg contraption—a complex of moving parts that must connect one to another for tax, regulatory, and reporting purposes.