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Key actions for indirect tax and trade compliance leaders

Key actions

Key actions

Today’s indirect tax and trade compliance leaders face an extraordinary array of challenges and opportunities in the indirect tax and trade environment — from Brexit to tax reform in Europe and the US to the introduction of VATs in India, China and the Gulf states, together with the increasing digitalization of reporting and compliance. Indirect tax and trade compliance leaders need to react quickly to determine their functions can adapt to complex new demands, and this requires having flexible systems, processes and technology that allows teams to respond immediately to foster compliance. At the same time, these functional leaders need to maintain a laser-like focus reducing costs and driving value.

As this report shows, indirect tax and global trade functions are still evolving. Many of them still have some way to go before they can not only meet compliance obligations efficiently and effectively while providing robust governance and control and contributing to the organization’s strategic thinking.

To meet these goals, leaders should consider how they can:

Make the most of technology and data

Harnessing the power of technology, data and analytics remains a major challenge for most indirect tax and trade compliance functions. More investment in this area is clearly needed and desired. Indirect tax and trade compliance leaders can gain their company’s support by articulating their future strategic role and by planning a blueprint for technology that not only increases automation but also informs important decisions about cash flow and supply chains.

 

Create performance driven cultures

Metrics link strategy to action, by clarifying what’s most important for the organization. Global heads of indirect tax and trade compliance build targets that can achieve compliance and also  improve the business. For indirect tax, this often revolves around improving cash flow by collecting faster and more thoroughly, and only paying what’s due. For trade compliance, it could be cutting the cost of goods sold, or making better use of treaties or free trade zones.

 

Build truly global functions

Appointing a global head is just the start. Organizations need standardized procedures, global systems and oversight across every country and region. In addition to providing scale efficiencies and consistency, a centralized model helps determine that specialists in indirect tax and trade compliance are making the key decisions. It also enables greater collaboration, transfer of good practices, and a focus on strategic goals.

 

Focus on risks

The risks facing these two functions can have far-reaching consequences for companies. In the case of indirect tax, errors or inefficiencies can have a huge impact upon cash flow, while inefficient trade compliance can seriously hinder the global supply chain. A strong focus on risk management can help determine that businesses are compliant (avoiding penalties and investigations) and consistent (through high-quality, independent audits).