Value Added Taxes (VAT)

A value added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale (Investopedia). Essentially the end customer pays the cost of the product less any of the costs of materials used that have already been taxed in the production process. This system is used most often in the European Union.

Given that changes to VAT rates require businesses to adjust their systems and meet new compliance standards relative to their country (ie, Ireland requires 6 returns yearly with 4 boxes to be completed, whereas the Czech Republic requires monthly returns with each return having 67 boxes to be completed). In a survey done by Pricewaterhousecoopers in 2010, it was concluded that on average it takes a company much longer to comply with changes in VAT than with corporate income tax.

Taking this difficulty of system change into account, NetSuite OneWorld includes country-specific tax reports for 42 countries, including both English and native languages to promote ease of use. By enabling businesses to adjust for currency, taxation, and legal compliance differences, NetSuite OneWorld provides a simpler, more streamlined solution for multinational firms to account for changing values and regulations.

To learn more about NetSuite OneWorlds global financial consolidation capabilities and benefits, click here!

1 comment:

  1. That's a good thing to have alongside your ERP; I've seen companies save a lot of money being sensible with VAT.