Thanks to the technologies that are now available, everything and everyone, from delivery companies to the Tax and Customs Administration, is working more efficiently. Many companies and institutions are doing their utmost to stay ahead of the game - or at least to ensure that they don’t fall behind. They want to be fast and efficient, but in doing so they often overlook the tax aspect.
So how do you stay abreast of rapid technological developments in a responsible way? And how do you ensure that your tax function keeps pace with your changing organisation in a fast-paced digital world? How do you automate your fiscal processes? With the right tax support, you can monitor your digital tax processes in order to intercept risks and create opportunities.
Automating compliance
A key priority in digital transformation is to automate your tax compliance from your ERP systems. If, for example, you are submitting a tax return that requires more than one signature, you can process everything digitally rather than having to visit each signatory individually. Did you know, for instance, that the most popular programme (among company tax specialists) is still Excel, which due to its reliance on manual input involves a high risk of error! Thanks to robotics, much of this routine-based work can be done by computers.
Rules governing VAT returns
VAT has now become the most important tax businesses have to deal with. Its significance will continue to grow due to the reduction in income tax and the increase in VAT rates. As a transaction-driven tax, VAT is ideally suited for data analysis. The Dutch Tax and Customs Administration is therefore likely to use the available technological tools to increasingly set up and maintain ‘open lines’ with corporate taxpayers. Organisations therefore need to think about how they want to structure their corporate governance for taxation. For example, how confident are you that the data your company submits to the Tax and Customs Administration complies with the relevant tax legislation? For an accurate insight into your VAT position (both opportunities and risks), contact the VAT specialists at BDO.
Beneath the surface
There’s no doubt that in the next few years, the Tax and Customs Administration will increasingly be conducting its audits and analysing data digitally. Partly due to the recruitment of more technology-driven staff, this means that these audits will be performed ever more quickly and efficiently. Random statistical samples are already being taken from audit files increasingly frequently. It’s therefore vital that you as an organisation have a clear understanding of the tax implications that lurk beneath the surface of your business. This will protect you from unwelcome surprises which you may unwittingly have caused yourself. Because BDO has a detailed knowledge of how the Tax and Customs Administration operates, it can apply identical mechanisms to the front-end of your tax function so that you can face audits with confidence.
Tax Control Framework
The Tax and Customs Administration also gives businesses the opportunity to obtain certainty about their tax position sooner. This is based on ‘transparent and constructive cooperation’ within a Tax Control Framework, a basic structure that allows businesses to audit, improve and monitor themselves. For the Tax and Customs Administration, it is especially important that companies learn from the mistakes they identify and set in motion the appropriate change management. CEOs are themselves responsible for creating and maintaining this Tax Control Framework. It is crucial that in doing so, you keep your fiscal processes top of mind so that if they change you can respond quickly to the associated tax implications. After all, you wouldn’t be the first business to sign a promising deal and get the transaction under way, only to find the entire profit wiped out by a tax oversight.
A better understanding of your business management and processes
As well as allowing you to steer clear of problems, growing digitalisation also gives you plenty of scope to use the data available to identify promising opportunities. For example, tax analytics dashboards can provide more insight into double invoice payments, your cashflow and effectiveness. The right tax support will put you in a stronger fiscal position. Digitalising your tax function in a responsible way will reduce your sensitivity to error and provide you with greater insight. That in turn means a better understanding of your processes, business management and effective tax rate.
BDO can advise and assist you in optimising and implementing your digital processes for tax purposes. We can also help and advise you on data analyses and how to present them in a visually attractive way by using clear and transparent dashboards. This ensures that the relevant people in your organisation are always able to understand the information provided, regardless of their digital proficiency.
What can BDO do for you?
Our specialists will be happy to tell you more about what our tax support service can do for you in the context of digital transformation. We are ready to provide you with new perspectives on the opportunities that are available within your organisation.