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Sales Tax Planning on the Rise at Global Companies

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New York (January 28, 2013)

By Michael Cohn

Tax executives from Global 2000 companies are increasingly relying on tax compliance strategies and planning when dealing with sales and use taxes and indirect taxes like the value-added tax.

Eighty-eight percent of the tax executives polled at Thomson Reuters’ most recent Synergy conference said they have seen an increase in activity by tax authorities in the last two years. In addition, 63 percent of the 60 survey respondents reported that they are spending more time on tax compliance strategy and planning.

In addition, 75 percent of the tax executives polled said they feel that tax authorities have changed the audit process in response to economic conditions. Seventy-seven percent said they have seen increased audits in specific states or home rule jurisdictions.

“Executives are still relying on tax directors to help manage cash flow and cut costs as we continue to recover from an ailing economy, but they are also looking to them to build sustainable global indirect tax best practices.” said Thomson Reuters ONESOURCE managing director Indirect & Property Tax Eric Ruud in a statement.

Only 33 percent of organizations have reviewed their IT systems to ensure continued compliance in light of recent changes to global VAT, according to the tax executives polled. Forty-four percent of the respondents indicated they have moved from enterprise resource planning systems to specialized systems to ensure compliance with VAT filing requirements and deadlines.

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