Market Perspectives

Indirect taxes — known variously as sales-and-use, value-added or goods-and-services tax — can get complicated, particularly in countries that have overly complex tax regimes such as Brazil, India and the United States. For example, in the U.S., state and local governments have their own statutes defining which goods are taxed and at what rates, and taxable items and rates change all the time. More recently, compliance has grown more complex with the Supreme Court’s Wayfair decision, which ruled to allow states to impose sales tax collection requirements on remote sellers that exceed a certain threshold, without regard to physical presence in that state. And now, going into 2022, sales-and-use taxes as well as VAT are likely to become more complex, and enforcement is likely to become more stringent in the wake of the pandemic.

In response to the increase in new laws and regulations that have been driven by the explosion in ecommerce, more countries now require companies to comply with the digitization of VAT and GST. This is being enforced to gain greater control and cut down on both intentional and unintentional reporting fraud. Digitized tax collection creates an opportunity for business software providers to create applications that simplify the process of keeping track of payments for indirect taxes across different regions as well as keeping track of exemption certificates. Vertex, a global provider of tax technology applications, recently launched an advanced, cloud-based software for VAT compliance called Vertex Cloud VAT Compliance Solution.

Vertex’s latest software launch addresses the changing tax environment in Europe and other countries to comply with the recent digitization of VAT and GST. Vertex has focused on delivering a unified product that is configurable for the end-user. It utilizes rule-based data quality and validation tools along with workflow automation to minimize risk of error and faulty reporting. This is an innovative approach to navigating the complex, mandated tax rules and regulations that are now in effect across the world. Signature-ready returns and reports have been expanded to include countries in Europe, Latin America, Asia and Africa. Vertex keeps an ongoing investigation of changing tax rates and exemption certificates needed for an expanding number of regions so that organizations can save time and focus on more strategic tasks. The uptick in ecommerce followed by the global pandemic and its impacts have spurred the need for more stringent regulatory enforcement for VAT and GST requirements. This has impacted every organization that operates in multiple tax jurisdictions, whether small or large. CFO’s, controllers and audit committees are tasked with getting their organizations in line quickly to meet the new guidelines.

Vertex Cloud VAT Compliance Solution is a cloud software and service that encompasses compliance, data integrity and audit prep. It is best suited for organizations looking to streamline compliance in current jurisdictions as well as new territories. CFO’s and controllers would benefit from implementing this product, as it is aimed at reducing errors and time-consuming tasks. It also creates workflow tools, dashboards and reports designed for management to visualize and track progress across the compliance process. Vertex would benefit from expanding coverage of VAT and GST regulations for new countries to help organizations continue to grow and expand into new territories.

Vertex has launched its VAT compliance application to help organizations navigate the latest regulatory changes as indirect tax filings become more complex and the growing digitization mandate continues to threaten operations. By adopting Vertex Cloud VAT Compliance Solution, organizations can expand into new markets without the hassle of trying to keep up with each territory’s tax laws and exemption certificates. With this flexibility, organizations can remain agile and respond to market opportunities without hesitation. It will also reduce costs by eliminating staff hours needed to ensure tax compliance.

To stay competitive and agile in today’s marketplace, organizations should invest in technology needed to effortlessly comply with increased rules and regulations. By failing to do so, your organization could be at risk of costly errors in non-compliance. Organizations that are looking for tax compliance software should consider exploring Vertex and its various applications.