On 17th & 18th November in London, over 60 VAT professionals came together for the 2016 VAT & SAP Summit. It was a busy two days where the topic of VAT centralization dominated conversations and attendees sought to update themselves and understand new EU tax regulations and expectations.
As always, so much rich content was shared by VAT experts and industry leaders. Here are 8 key takeaways from the event:
1. If the management of VAT is centralized, the savings are significant. NSG say they have tracked over $1 million in indirect savings so far by centralizing their VAT function. Centralizing the management of VAT into a shared service center can be worthwhile if it’s executed correctly.
2. We are seeing the biggest shift in the Tax landscape right now since Sarbanes Oxley came into play. BEPS and SAF-T have been topics of conversation for several years now but the pressure to comply, especially with SAF-T regulations is growing. Poland only operates on a SAF-T basis with other countries following, according to Stuart Nivision Head Indirect Tax Thomson Reuters, no other regulation has dominated the Tax industry like this in over two decades.
3. The legal/cultural differences are always an afterthought – better education is needed. The establishment of VAT processes can be difficult, more so if you are presented with different legal and cultural approaches – depending on where you operate. Acknowledgement of the legal and cultural challenges upfront will make the execution of VAT processes easier and strengthen VAT compliance within your business.
4. High quality master data will make your VAT life easier as there is less chance of any errors being made as processes are executed. If you are willing to invest in tax technology, or if you are looking to make your VAT processes exceptional, you must get the basic data right. Data drives process excellence within VAT, and if the quality isn’t good enough, your processes are at risk.
5. There’s a level of ambiguity regarding the implications of Brexit, however Pedro Pestana Marosa Tax said that what is certain is that Intrastat and ECSL will disappear and triangulation will disappear (with a few exceptions). This is becoming more and more obvious post-Brexit and with further changes in regulation across Europe it is certain that Intrastat and ECL will vanish. For triangulation, it is being viewed on a case-by-case basis – watch this space.
6. If tax is being digitized, you need the support from IT + IT knowledge. More than ever it’s important for VAT and IT to be aligned, particularly as the topic of conversation falls more under the IT repertoire – Tax needs to up its IT game.
7. VAT processes and technology can’t be just adequate, you need world-class standards. The pressure on Tax functions to deliver world-class results and enforce 100% compliance is growing. Therefore innovation, investment and compliance penalties are contenders in the race to stay world-class. Authorities are getting better at investigating than you are at preparing tax and audits – they’re one step ahead – they’re processing info in seconds, so are after more information. It’s becoming the case that Tax functions need to be ahead, and more we are seeing Tax functions on the back-foot and it’s just not good enough.
8. Cloud will revolutionize the Tax industry. This had to be the ‘hot topic’ of the event and was touched upon in every presentation. Cloud technologies are here and they are revolutionizing industries, it’s just a matter of time before the Tax industry jumps on board.
These are only a few snippets of the content and points that were shared at the event, but as you can see they are reflective of the changing state that the Tax industry is currently in. if you have any comments please do email them to amy@sharedserviceslink.com as we’re always keen to keep the conversations going.
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