5 Indirect Tax Challenges Financial Professionals Face—And How to Solve Them

Image of three people in front of a blue background that reads "FS AWARDS. In association with KPMG. Celebrating excellence in financial services." One person in a suit is presenting the award to the other two, who wear brightly-colored dresses. All three are smiling.

O-Series allows for “global organisations” to navigate the landscape. Advantage allows organisations to navigate the landscape to become global. 

Advantage’s key focus is to provide market access through the removal of complexity. New rules and regulations impact everything from how sales are charged in the online shopping basket, to tax filing, and reporting. 

For example, if a business sells goods stored in the UK, to UK customers, but does not have a business establishment in the UK, they are classed as an overseas seller and subject to that country’s tax laws and jurisdictions. Those who do not manage their indirect tax effectively will not only find it more difficult to scale but potentially expose their business to compliance threats. 

To better understand this, Vertex surveyed over 700 senior finance professionals about the indirect tax challenges they are currently facing. When asked what aspects of indirect tax management are hindering their growth ambitions, almost half of all respondents agreed that their five main struggles are:

  1. An increasing need to perform VAT/sales tax calculations and charging at the digital point of sale
  2. Registering with all the local tax authorities in every country they trade-in
  3. Dealing with unsustainable and manual indirect tax processes 
  4. Providing accurate and timely sales tax/VAT/GST reporting and returns
  5. Keeping up with the ever-changing/expanding global VAT sales tax rules 

To address these pain points, finance professionals should look for a tax automation software that can help facilitate seamless online sales in multiple countries and currencies, so that their business has the flexibility and speed necessary to scale. The key features to look for include the ability to: 

  • Continually update tax rules and rates, supporting the latest regional and jurisdiction-specific tax requirements
  • Identify customer location using multiple data points with evidence hierarchy determined by the merchant
  • Validate business tax numbers and offer reverse charging to business customers where applicable
  • Invoice in local language according to country/region as well as multiple options for invoice delivery and analysis
  • Apply foreign exchange rates for every transaction including rate source and time point
  • Monitor tax thresholds to show online sales against tax rules 
  • Report on country-by-country and multi-currency to give businesses insight through data-driven dashboards 

Vertex is committed to pioneering indirect tax innovation and strives to equip tax professionals with the knowledge and tools they need.  

Our solution, Vertex Advantage automates VAT/GST and U.S. sales tax calculation and drives compliance from quote through to invoicing, supporting everything from customer location identification and indirect tax calculation. Recently awarded the International Finance Award 2022 from FS Awards in Dublin which recognizes initiatives that solve all cross-border obstacles, providing convenient and fast business solutions, Vertex Advantage can help your business trade globally. 

FS Awards trophy for 2022, distributed in association with KPMG. The award is clear and diamond-like, reflecting blue and purple light from the background.

Discover more about Vertex Advantage here

Blog Author

Niall Kiernan

Senior Director of Product Management for eCommerce and Marketplaces

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Niall Kiernan is the Senior Director of Product Management for eCommerce and Marketplaces. His backgrounds spans multiple industries of finance, paytech, retail and risk, taking on multiple roles from operations to sales to strategy. With a master’s degree in Product Management, experience in delivering solutions and building viable products, Niall focuses his time on creating an eCommerce and Marketplace strategy within Vertex that allows businesses to quickly and compliantly expand their business.

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Automated global tax calculations fit seamlessly into your online sales journey and provide a solid foundation for managing compliance requirements.

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