Communicating via Skype might be clear and easy, but managing telecom tax complexity is anything but. Microsoft Corporation was facing a host of tax challenges. Among them were:
- Unbundling telecom services and capturing the detailed transaction results
- Making taxability determinations and rating/calculating taxes, fees, and surcharges by applying a different telecom or non-telecom tax category to each unbundled component
- Linking taxes across components
- Rating single-month, multi-month, and multi-year billings upfront using both the simultaneous exclusive and tax-inclusive prepaid services across the different bundled offerings
Taking Control of Telecom Tax Complexity
To take control of that complexity, Microsoft needed a scalable, flexible, and function-rich telecommunications solution that could support its sales channels—small-to-midsize business, government, education, large-volume licensing, and reseller and distributor channels.
The goal was to build a telecom solution within the standard tax software package. Implementing two different tax software solutions was not an option. Nor was the business willing to modify how it sold non-telecom services.
Microsoft selected Vertex Indirect Tax O Series for the job. The company now has an in-house solution for telecommunications tax that functions across all billing systems and permits all existing business channels to leverage the same solution—regardless of differences in customer details or data quality.
Standard sales and use tax, GST, VAT, environmental fees, and other taxes are now calculated or exempted in the same system, and at the same time as telecom is unbundled and rated. The company has experienced significantly improved tax reporting and tax forecasting.
Microsoft’s vision was to calculate or rate all transaction taxes, surcharges, and regulatory fees and maintain all exemptions on a single platform. Vertex enabled this vision by delivering North American telecom content for Vertex O Series, and continued to support Microsoft in their global rollout for e-commerce sales.
Explore our communications services tax solutions.