Your business has more important things to worry about than VAT, but unfortunately it is the most complicated tax in the world and most tax offices across the globe treat compliance with their VAT legislation and receipt of the associated tax revenue as their highest priority.
Therefore, it goes without saying that your business should ensure you are fully compliant with your VAT obligations in all countries you trade, but there is a hard way to do this… and an easy way.
If you have multi-jurisdictional VAT obligations (more simply: your business needs VAT numbers in several different countries), then it is a no-brainer to try and centralise this core tax function as much as possible.
Centralisation can occur in two ways: either you have a single “shared” internal finance team responsible for your company’s VAT compliance and reporting, or you appoint an outsourced VAT partner who can act as your representative in all countries and offer you a “one stop shop” solution.
If you intend to take on the compliance burden in-house, there are several factors to consider, but that is not the purpose of this article. The intention is to inform readers of the considerations of outsourcing the VAT compliance service to an expert and highlight the benefits and practicality of centralising this through one provider.
What your business gains from using one provider should be obvious:
- Lower costs.
- Better communication.
- More efficient service.
- Single point of contact for operations, billing and technical support.
- Harmonisation of processes.
Not all VAT compliance companies can offer a true one-stop-shop, so it is important that when benchmarking a centralised solution, you take the below into account: