Global heads of indirect tax are most likely to be based in the UK or Germany than in any other country, according to new research by KPMG.
A survey by the Big Four firm found that 64% of international tax executives do not have a global head of indirect tax working for them. But where global heads of indirect tax do exist, the UK is the most popular location for them with 37% working here, followed by 17% in Germany, 12% in the US and 6% in Switzerland.
When it comes to indirect tax, multinational businesses are missing significant opportunities to manage risk, improve cash flow and reduce costs by avoiding incurring penalties and fines for compliance errors, KPMG warns.
The firm argues that many CFOs measure the effectiveness of their tax department by focusing on corporate tax and they pay insufficient attention to indirect taxes such as value added tax (VAT) and goods and services tax (GST). According to the research, 83% of respondents do not have VAT or GST performance goals that are visible and meaningful to the CFO.
Commenting on the survey, Gary Harley, head of indirect tax, KPMG in the UK, said: “With VAT/GST often the third-largest cash throughput managed by business after sales and cost of sales, the survey shows little resource is allocated to its effective management. We believe focus and investment will enable businesses to better comply with the requirement to collect these taxes and manage the risk around incurring penalties more effectively, improve cash flow and thus reduce bottom-line cost.”
Sally Percy is editor of The Treasurer