I am in beautiful, sunny Florida attending the Vertex Exchange conference with 300 or so other tax technology folks. The people attending this conference are mostly tax managers and tax analysts from companies that are based in the US but may operate around the globe.
I was discussing certain challenges I encountered recently on a project with some colleagues from “across the pond”. Coincidentally, as service providers assisting companies in the US, they are seeing the same challenges.
Given free trade and the internet, it is much easier to get global exposure these days with respect to providing goods and services to customers outside the US. So we are seeing US-based companies branch into international markets. They recognize right away that they need to address the VAT consequences of those business ventures … VAT rules can be very interesting depending on the countries involved!
But US companies suddenly launched into international trade often don’t recognize the other aspects of these international business transactions that will affect them. Things like tracking the origin of components used in configured products, packaging and labeling, identifying where shipments are going and how to clear customs, determining international terms for shipping and financial responsibility, language requirements for documents being sent outside the company to suppliers and customers, and even how external documents like purchase orders and invoices are required to be numbered.
My colleagues agreed that those of us involved in international tax technology projects often find ourselves providing education on a broad range of business and system design initiatives.
Best case scenario is that these requirements get identified early and the appropriate business processes and system components are designed to meet requirements according to the company’s business footprint. Worst case is that we are happily building and shipping our products but they are stalled at the border of the intended customer’s destination country. So we must scramble to get compliant … and quickly! But we all love a challenge, right?
