Business Events That Impact VAT

A company's value added tax (VAT) position can be effected by more than just day-to-day business activities and legislative changes. From time to time, every business experiences occasional or one-time events that warrant a reexamination of their VAT position. Events such as mergers, acquisitions, the implementation of new accounting systems, changing global economic conditions and others, can impact the way a company manages VAT. With the help of appropriate VAT software, companies can help effectively manage their VAT position when such events occur.

Essentially, any event that effects a company's overseas supply chain will in turn impact it's VAT position. The following are a selection of key events that can impact how VAT affects international businesses:

International Mergers and Acquisitions - The most common reason for this event to occur is because a company wants to expand into new geographic business areas, which from a VAT perspective means new tax jurisdictions. The coordination of two or more accounting systems, possibly using different types of VAT software, makes the overall tax position more complex. In which case, VAT compliance is often overlooked until later in the integration process.

Outsourcing - Elevated VAT may be incurred when companies outsource non-core business functions instead of handling them in-house.

Global Contracts - Multinationals utilizing a single supplier for goods and services in multiple countries, then submitting a single invoice, need to understand the complexities of managing VAT with such a contract.

Central Procurement - Leveraging a group's buying power through central procurement companies can help to reduce costs, but special attention must be paid to the numerous VAT registration and filing liabilities the procurement company may occur.

Shared Service Centers - A centrally located finance and accounting center within an organization may be required to file multiple VAT returns for numerous countries.

Learn how Vertex VAT software can help your business effectively manage the value added tax changes that accompany occasional or one-time business events.

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