One of the leading issues faced by companies requiring significant amounts of global tax research data is the associated business expense. This is mainly because few supplier organizations have the geographic reach to provide such diverse and specialized information.
There is now optimism however around potential solutions to this issue, largely based on the exponential growth of online tax communities.
These social media networks present interesting possibilities as far as tax discussion is concerned. Is it only a short leap from there to an online marketplace for, among other things, tax data either as a commodity or in terms of online advisory services?
To satisfy my own curiosity, I posted a request for information in a LinkedIn tax discussion forum and, at the same time, sent the request to our usual tax advisors. Within 48 hours, the posting had generated responses from local VAT specialists in six countries, each giving me the information I needed at zero total cost. The consulting supplier took considerably longer and at a rather higher cost to provide what amounted to the same information. Does this mean that companies should start dropping their advisers and begin going it alone online? The answer is no – at least not yet.
When it comes to tax research data, businesses must be extremely cautious in respect of reliability, quality and, above all, risk management in their sourcing policies. Even though business-networking sites have active tax discussion forums, this does not make them sole resources on which to hang a business strategy.
The reality is that these online tax communities found on social networking sites are, generally, set up and run by private individuals who devote personal time to the task, but who otherwise earn their living outside the communities they operate - meaning that they are not necessarily 100% reliable. However, online tax communities can also help companies to stay abreast of trends, wants, needs and obtain important industry-specific information.
Progress will continue to push the evolution and maturing of online tax data sources. It’s interesting to imagine the potential of digital tax communities providing a true online worldwide information exchange… with only the click of a few buttons.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.