Value-Added Tax (VAT), Goods and Service Tax (GST), and other transaction-based taxes:
In a world hit by instability and crisis, the pace of change remains high, pushing taxpayers to thoroughly review the way they manage their indirect taxes, comply with new regulations (digital and real-time reporting, e-invoicing etc.) and respond to new requirements around plastic/packaging/environmental taxes. Disruption, high inflation and an energy crisis mean additional factors to consider when building efficient supply chains. Governments are also seeking to increase their state revenues through tax audit campaigns, data mining and strict new regulations to fight fraud. All these factors contribute to the need to accelerate the digitalization of indirect tax processes, as well as adapting business models, organizations and strategies. As a result, managing indirect taxes, keeping track of continuous change, investing in automation and keeping risk under control remain essential challenges for companies.
Deloitte’s indirect tax group, including VAT, GST, and global trade advisory (including customs, excise duties, and export controls) personnel, are specialists who understand the nuances and complexities of regulations, the importance of deep industry knowledge and the growing importance and role of technology to help companies successfully operate their indirect tax function.
Highlight your regional network in a few sentences (what’s unique or different):
About Deloitte EMEA indirect tax:
Deloitte’s indirect tax practices across EMEA include 113 indirect tax partners and over 1,300 indirect tax professionals. This feeds into a global indirect tax network of more than 3,000 indirect tax professionals working alongside and together with Deloitte’s other service lines to bring broad-scale, tax-aligned business compliance solutions. The practices stated mission is to deploy the right industry-focused local and regional teams quickly to suit the needs of each client.
Key differentiators include: a focus on industry specialism; a unified strategy and quality standards; a suite of Deloitte proprietary indirect tax tools, software and products; and a network of virtual and physical Centres of Excellence (COEs) supporting indirect tax compliance and global trade advisory. These are aligned with Deloitte’s technology platforms globally, offering a wide scope of integrated indirect tax and global trade compliance, consulting, and automation services.
- Indirect Tax advisory, including VAT and GST as well as other transaction-based taxes (including new taxes in the field of sustainability and environmental levies);
- Indirect Tax compliance and reporting;
- Indirect Tax automation;
- Indirect Tax strategy, transformation and operate (the indirect tax function); and
- Global Trade Advisory and Compliance (GTA).
Can you speak to the indirect tax growth in your region (why/how it’s affected the business)?:
In the course of 2021 and 2022, gradually stepping out of the pandemic, our European economies have been impacted by various external factors which have caused inflation, disruption in supply chains, and a large energy crisis connected with sanctions adopted by the EU. This has led to many discussions with companies reviewing their supply chains, business models, and processes and/or being subject to thorough indirect tax audits.
More than ever, emphasis has been put on assisting companies to navigate through various complexities, focusing efforts on the multitude of trade, customs, and VAT-related measures taken by the EU and other governments, advising and assisting to help cash flow, liquidity, process efficiency and business continuity related strategies. This is where our wide spectrum of offerings, IT solutions and deep industry experience can help companies tackle the challenges of today and tomorrow. Besides short-term strategies, the need for digitalization (of business models, accounting, and compliance processes) is increasing everywhere, while requirements are developing, albeit not in a harmonized way.
Deloitte practices in EMEA have continued investing in various technologies and solutions to help companies track, monitor and handle the various local country legislative changes.
Creating a future-proof indirect tax data model, therefore, seems to be at the heart of many concerns, with companies realizing that navigating through the maze of digital tax requirements needs investments and/or a new vision. Besides the shift from a “push” (traditional periodic compliance and reporting combined with a tax control framework) to an increased “pull” approach (tax authorities requiring relevant indirect tax data sets, almost continuously and in real-time pulling data from companies’ systems), companies now have to think about interfacing with many different platforms and systems.
Finally, a recent trend connected with such a complex environment is, besides the need to transform and revise strategy, an increase in the number of projects where companies ask a service provider, such as Deloitte, to assist in ‘operating’ their indirect tax function, either by outsourcing an entire process (e.g., customs compliance, SPL screening, and mass classification in the trade and customs area or VAT and local taxes compliance), transferring the internal advisory function (towards business, IT, finance, and other company stakeholders) or even asking to manage key function essentials, such as process, technology, advisory, and risk management on their behalf. This offers a great collaboration between teams and peace of mind for companies, enabling them to concentrate on their core strategy while leaving the operational side of managing indirect taxes well under control.
How is your region innovative? Speak of digital capabilities:
More than ever, the most important word in the world of indirect taxes is ‘data’, which has to serve so many purposes (traditional VAT and customs compliance but also invoicing, bookkeeping, e-invoicing, real-time reporting, standard audit file for tax (SAF-T), local listings and local taxes, new environmental taxes, and then reconciliations, analytics etc.) and is required to be ‘future proof’, considering new un-harmonized compliance requirements developing everywhere.
As such, Deloitte’s indirect tax practices in EMEA have combined their technical specialization with the technology capabilities of Deloitte’s IT and tech professionals. This has resulted in the development of deep tax technology and analytics capabilities.
Indirect Tax Compliance (“ITC”) is a Deloitte proprietary compliance technology offering, designed and developed to support centralized delivery of global indirect tax compliance, enabling increased efficiency and quality in the preparation process for indirect tax returns. It covers more than 75 countries and a wide variety of reporting requirements, including real-time reporting, SAF-T requirements, Making Tax Digital, e-invoicing etc. In addition to these customizable features, ITC offers analytics capabilities, management reporting and data visualization through dashboards that provide process and trend analysis information. ITC can be seen as a true ‘platform’ to manage VAT compliance and is one of the most globally advanced, broad ranging and user-friendly solutions on the market. It also exists as a ‘software as a service’ (SaaS) solution, for companies that wish to operate indirect tax compliance activities in-house.
In this context, Deloitte has also developed the concept of Enterprise Platform (ETP Core) which is a “data lake” concept, allowing data to be automatically extracted from companies’ ERP systems (using our own Deloitte developed Extractor tool), being subject to a services of data enrichment, wrangling, and other review/check/control activities, before being processed (through ITC or other compliance solutions) and pushed automatically through various tools (including communication platforms with tax authorities, e-invoicing, dashboard and analytics tools, management reports, deliverables in various formats, archiving software, tax determination processes etc.). Such an ecosystem is seen as very powerful, connecting Deloitte and non-Deloitte solutions, performing required activities around the same data in a protected and automated environment.
Regarding customs and global trade, Deloitte has many proprietary solutions, such as Track on Trade, a fully fledged customs and trade compliance solution to manage all relevant filings, licenses, authoritisations, and customs regimes in an automated way; Trade Classifier, which uses artificial intelligence and cognitive technologies in the field of harmonized tariff schedule classification (for assessing customs duties and managing customs compliance, but also for VAT rate determination and Intrastat preparation); CustomsClear, a UK-developed solution to enable companies to easily draft and file customs declarations in a user-friendly app environment. In the UK, a Global Trade Bureau has also been established, i.e., a group of customs brokers who simplify, accelerate and complete the full customs declaration process on behalf of clients, using state-of-the-art solutions.
Next to these customs and trade ‘compliance’ solutions, Global Trade Radar is an analytics solution that uses data sourced from customs authorities to produce detailed, insightful customs analytics across multiple jurisdictions in one dashboard. Opportunities like cost-savings, repayments and risks, such as compliance weaknesses, are identified and insights are summarized through a series of interactive reports. It also exists for VAT, in the form of the Global VAT/GST Radar, which enables companies to rigorously review the quality of their VAT data and assess potential deficiencies in their VAT compliance processes through a provisioned system of predefined checks and balances.
Finally, in the field of indirect tax knowledge and structured content, Deloitte has launched its global Indirect Tax Knowledge Hub, an innovative way to capture, gather, curate and manage indirect tax changes taking place around the world (VAT knowledge, but also environmental taxes, digital requirements etc.), directly feeding into a series of knowledge-related deliverables, including a Knowledge Portal, a single site for Deloitte’s indirect tax practitioners and clients to access a wealth of indirect tax knowledge and tools, including:
- Moonlight A.I., an artificial intelligence-powered predictive solution analyzing European court of Justice case indirect tax decisions;
- VATbot, the Deloitte VAT chatbot, which helps to determine VAT treatments as well as analyze indirect tax cases and transactions in an innovative way;
- Indirect Tax Atlas – Electronically Supplied Services, a platform to help users to understand enacted and upcoming changes in the taxation of digital services.
- PxS, an automated VAT solution assisting partially exempt businesses with VAT analysis and modelling, enabling allocations, sectors, and recovery methods to be modelled based on the impact analysis to the overall VAT position. Deloitte is currently developing a reporting module connected to PxS for automating the preparation and filing of Insurance Premium Tax returns.
Deloitte teams across EMEA are also working on various other business applications, such as VAT Cube (a solution focusing on SAF-T, real-time reporting and e-invoicing across various jurisdictions), the chain analyzer, blockchain solutions, etc.
- In International Tax Review’s 2022 European Regional Tax Awards, Deloitte again won more awards than any other firm, with 32 awards. Some of the pivotal wins are mentioned below:
o European Diversity Equity & Inclusion Firm of the Year
o European Indirect Tax Firm of the Year
o European Indirect Tax Rising Star
o European Tax Firm of the Year (for the sixth consecutive year);
o European Tax Compliance & Reporting Firm of the Year (for the sixth consecutive year);
o European Tax Innovator of the Year
o European Tax Policy Firm of the Year
o European Tax Practice Leader of the Year
o European Tax Technology Provider of the Year
National Tax awards: Africa, Austria, Belgium, Bulgaria, Central and Eastern Europe, Romania
National Transfer Pricing awards: Austria, Baltic States, Belgium, Central and Eastern Europe, Denmark, Finland, Germany, Ireland, Luxembourg, Middle East, Norway, Portugal, Sweden
National Indirect Tax awards: Germany, Luxembourg
National Tax Disputes awards: Poland, Romania
- In (ITR) 2021 European Regional Tax awards, Deloitte won more awards than any other firm, with 26 awards in total.
- In ITR’s 2020 European Regional Tax awards, Deloitte won the Tax Compliance and Reporting Firm of the Year and the European Tax Firm of the Year.
- In ITR’s 2019 European Regional Tax awards, Deloitte won more awards than any other firm with 17 awards in total.
- Deloitte has been a Tier 1 Tax advisor in the Gulf region since 2010 according to the International Tax Review World Tax Rankings.
- Kendra Hann, Deloitte Global Leader Indirect Tax
- Kristine Dozier, Deloitte Global Leader Trade Advisory
- Johan Hollebeek, Deloitte Global Leader EMEA Trade Advisory COE
- Rogier Vanhorick, Deloitte Global Leader Indirect Tax Digital
- Olivier Hody, Deloitte NSE Leader Indirect Tax
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