The start of the New Year is the ideal time to focus on your company’s indirect tax policies, tax risks and changes to relevant laws and regulations. Take this opportunity to set clear and workable policies, standards and guidelines that take advantage of best practices in tax planning and preparation.
Realize that there is no ‘one-size-fits-all’ approach to the design and implementation of a solid indirect tax strategy. However, the goal should be to create an indirect tax function that is operationally fit and fully aligned with the priorities of the business. Here is a checklist to help guide your planning:
- Note upcoming changes: Proactively anticipate tax-related changes within the company and within the industry, and clearly communicate those changes to the relevant departments. Changes may include centralized/decentralized activities, indirect tax provisioning, governance, audit challenges and possible penalties.
- Select new tax projects: Identify, recommend and implement indirect tax projects that will assist in achieving the business objectives. Projects may include business developments that can be turned into tax opportunities, technological advancements, proactive implementation of tax-related changes to business, laws and regulations, changes to the amount of businsess to business VAT under management or working capital requirements.
- Identify and manage tax risks: Ensure that this exposure is communicated clearly. Consider how best to mitigate this risk within the framework of your business activities. If necessary, ensure your company is represented and protected by relevant authorities or lobby groups.
- Learn from others: Participate in domestic or international tax groups and conferences that are relevant to your industry in order to integrate best practices for tax planning, communicating risks, foreign VAT reclaim, managing audits or achieving compliance.
- Take a leading role: To be most effective, the tax department’s role must transcend basic technicalities about VAT liability. Tax professionals should focus on operational issues affecting the integrity of transactional reporting, as well as visibility of VAT compliance across the enterprise.
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