Why is getting VAT right so important?
VAT (Value added tax) is now the most common form of consumption tax system used around the world, figure 1. Yet many Businesses find that VAT is the most complex tax that they have to deal with. It’s not hard to see why, with the rules and regulations constantly changing businesses struggle to keep up and ensure that they pay the right amount of VAT, and the consequences of getting it wrong can be very costly.
From fines for not paying the right amount of tax or missing out on tax that could be reclaimed it’s not something you can afford to ignore, especially for businesses operating in multiply countries or tax jurisdictions.
|VAT Indirect Tax Type Used Globally
Even though the principles of tax are broadly the same across the world, the rules are implemented and enacted differently, so the compliance burden on businesses can vary significantly. The more complicated the VAT system the longer it can take to comply and the longer it will take for businesses to get refunds. On average it takes 40% less time for businesses to process their corporate income tax than it does for them to process VAT. It also varies greatly by country, but on average in the EU it takes 73 hours to comply with VAT.
A poorly designed indirect tax system will only add to the hours needed to comply with regulations, adding stress and potentially resulting in costly audits.Different administrative practices and the way in which VAT has been implemented are key reasons for the range in hours that it takes for businesses to comply with VAT requirements. With this in mind and the fact that the Oracle R12 e-Business Tax module allows for a fully automated solution, why do so many companies suffer such poorly designed indirect tax solutions?
At eBiz Answers
, we understand these requirements and work closely with our customers to ensure that not only are your existing indirect tax needs met, we also provide a structure to allow for the easy adoption of any changes, be they driven from the business or due to statutory requirements. We work around your specific requirements and produce a tax solution tailored to your needs, this will significantly reduce the hours needed to implement new tax systems and comply with old ones, saving you both time and money.