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Managing Value-Added Tax (VAT) in a Global Environment
Aberdeen Group, Feb 2011, Pages: 25
Despite a recovering global market, governments worldwide are still facing a revenue shortfall. To address this problem, they are strengthening audit initiatives in hopes of claiming additional tax dollars from companies. The area of value-added tax (VAT) has been a prime audit focus, with transaction taxes accounting for a significant portion of government revenue.
In Aberdeen’s May 2010 study, 'Effective Sales and Use Tax Management: Reducing Errors and Increasing Productivity', 47% of companies are accelerating their tax compliance initiatives due to this sharp increase in government audit activities. Aberdeen hypothesizes that to achieve success in managing VAT, Best-in-Class organizations must have effective access to taxability requirements and tax rates for products and services, and streamline processes that support accurate VAT preparation, filing, and remittance / recovery.
Key benefits of the report:
- Address Errors Quicker
- Decrease Penalties / Fines
- Streamline Processes
Best-in-Class Performance
Aberdeen used the following four key performance criteria to distinguish Best-in-Class companies:
- 90% of all government audits in the past five years yielded positive results
- Only 13% of all internal/reverse audits in the past five years revealed overpayments
- 36% decrease in cost of audit penalties/fines over the past two years
- 30% reduction in time dedicated to addressing tax errors over the past two years
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