Richard Cornelisse

Benchmark your VAT control framework

In Audit Defense, Business Strategy, Indirect Tax Strategic Plan on 30/04/2015 at 4:14 pm

Benchmark information, templates, modules and approaches are shared to support VAT process improvements and meet business objectives

The added value of benchmarking the VAT function against best practices in the market is to gain objective evidence to what has already been achieved but also what still needs to be done to get there.

Our ‘free’ community Global Indirect Tax Management (GITM) website shares benchmark information about the effective management of VAT. It shows the area where risk based controls are to be expected and in addition shares templates and methods for self assessments purposes.

The article ‘Roadmap to Indirect Tax Function Effectiveness’ summarizes the GITM content:

  1. Why is management necessary and what needs to be done?
  2. How to realize objectives via best practice approaches, tools and methodology?
  3. How to increase indirect tax function’s effectiveness?
  4. Achieving stakeholder satisfaction
  5. Writing a business case / problem statement and calculate Return on Investment (ROI)

A webcast sample

Non-routine transactions

One of the chapters relate to non-routine business transactions such as:

Those significant transactions will always exceed the company’s risk appetite and these articles explain why, what and how it should be managed.

The following selection of articles supports overall effective VAT management: Company’s ‘governance’, ‘operation’ and ‘infrastructure’ and ‘VAT Control Framework‘.

A webcast sample

All our ‘learning lab webcasts’ are in English and contain subtitles in YouTube mode.

We hope you appreciate our initiative. GITM is continuously updated via input of the reader’s community all over the world.

Your feedback is therefore welcomed.

Audit committee agenda: Tax risk in focus

In financial audit on 28/04/2015 at 10:42 pm

KPMG has provided a valuable reference re: 2015 audit committee topics, providing insight into company risks and the importance of governance.

The following extract, from the report provided as reference, addresses tax risks in the following manner:

Pay particular attention to the global “tax transparency and morality” debate being driven by notions of “fairness”and “morality,” and consider the impact of tax risk on the company’s reputation.

Tax is no longer simply an expense to be managed; it now involves fundamental changes in attitudes and approaches to tax globally.

Ensure that tax decisions take into account reputational risks and not simply whether the company has technically complied with tax laws.

Monitor OECD and governmental efforts globally to address perceived transfer pricing abuses.

Help shape the company’s tax risk appetite, and establish a clear communications protocol for the chief tax officer to update the audit committee regularly. Help ensure the adequacy of the company’s tax resources and expertise globally.

Highlights of future trends:

  • Transparency
  • Reputation risk
  • OECD monitoring
  • Transfer pricing abuse
  • Tax risk appetite

To the extent the Audit Committee has not inquired into BEPS, tax risk frameworks, OECD Actions and transfer pricing governance,  a proactive effort should immediately begin to align the Board with the MNE’s tax risk posture and ongoing governance.

It is imperative a robust tax risk framework is established and communicated effectively.

Source:  Audit committee agenda: Tax risk in focus — WordPress.com.

M&A Integration and Indirect Tax: managing the moving parts before, during, and after a transaction

In Business Strategy, Indirect Tax Strategic Plan, Processes and Controls on 16/04/2015 at 4:41 pm

The aim is to provide insight into these risks and build into the contract adequate coverage in case risk history repeated itself. Armed with this information, the buyer can negotiate a reduction of the selling price or secure indemnification from the identified risk.

Although fundamental tax due diligence is still a requirement for the purchase of a company or assets, it is only the opening chapter.

Equally important are exploring and thinking through options for structuring the indirect tax profile and how it will function in the organization post acquisition and throughout implementation and integration.

Note that the webcast has subtitles in English.

Richard H. Cornelisse

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