Indirect tax still a focus for board and senior management
15 April 2015
Deloitte, the business advisory firm, today releases findings from its 2015 indirect tax survey. Indirect tax continues to be a topic of discussion at board and senior management level. Two thirds of respondents (67%) said that VAT and GST (Goods and Services Tax) had been discussed by the board or senior management in the last year.
Kendra Hann, indirect tax leader at Deloitte said: “There are definite themes in the topics discussed at boardroom and senior management level. HMRC’s policy on the VAT treatment of holding companies, the implications of the Skandia case about VAT grouping, managing compliance risk, and managing partial exemption were all topics cited by a number of respondents.”
Over half of respondents have been asked to justify their indirect tax strategy over the last year, receiving questions from a broad range of stakeholders within their organisations. There continues to be interest from employees inside (36%) and outside the tax function (38%), commercial teams (34%), non-executive directors (7%), and board members (30%).
Impact of BEPS
Around two-thirds of respondents say that their organisation has started to look at the impact of the OECD base erosion and profit shifting project (BEPS), and in the majority of these cases (57%) they involve the indirect tax team. In a fifth of cases (22%) the indirect tax team was closely involved and over a third (35%) said they were involved in a limited way.
Relationship with HMRC
A good relationship with HMRC is cited as important by respondents and for most it is stable and in good shape. Over 70% of respondents said they have met with HMRC to discuss VAT in the past year and describe their relationship as good (59%) or excellent (21%).
Hann adds: “Many respondents referred to regular meetings with HMRC, risk reviews, and other customer relationship manager meetings. Aside from these regular meetings, the most-often cited reason for a meeting with HMRC was to discuss partial exemption. Discussions also took place regarding a number of other issues, including VAT return queries and changes to business structures and systems.”
VAT leaders – European remit
Almost 60% answered yes to being responsible for indirect tax outside of the UK, the majority of these having a European remit, but significant numbers with responsibilities in other regions. This is consistent with the findings from previous surveys.
Hann concludes: “Indirect tax professionals are faced with ongoing global developments in indirect tax law and policy, with countries continuing to adopt VAT and GST systems and adapt their existing systems in line with international norms. Significant recent developments include the introduction of GST in Malaysia, the proposed GST in India, ongoing changes in China and changes to the VAT and GST treatment of electronically supplied services in a number of jurisdictions.”
Notes to editors
This is the third survey of UK indirect tax professionals that Deloitte has carried out. More than 130 tax professionals participated, with over 70% working in companies with a turnover in excess of £500 million. The survey was conducted in November and December 2014.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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