Large companies approach their fiscal strategy as a dynamic framework shaped by internal and external factors. This strategy covers the primary taxes in the company locations and is aligned with the general corporate strategy.
Potential benefits of a documented Indirect Tax Strategy:
- Clarity about risk tolerance in the area of indirect taxes. This clarity facilitates the coordination of opportunities with the broader commercial objectives.
- Improvement of the consistency and efficiency of processes relating to taxes.
- Placement of Indirect Tax on the agenda of important business and financial stakeholders.
- Monitoring and strengthening management in decentralized and foreign locations.
- Identification of opportunities to improve systems, processes and controls.
- Identification of areas where extra resources for indirect tax are necessary.
Preparation and rollout of the plan may include the following:
- Clarification of the scope and objectives of the project. This is the phase in which management considers and enunciates its expectations and risk tolerance.
- Workshop with the Indirect Tax department and important business and financial stakeholders about the general corporate strategy, risk tolerance, stakeholder requirements and indirect tax functions.
- Elaboration, evaluation and establishment of an indirect tax strategy document by the Board of Directors.
- Company-wide rollout of the strategy for better understanding of risk tolerance and acceptable planning.
- Revision of the strategy and documentation and keeping it up-to-date, and reviews of strategy effectiveness.