The survey is further proof of the growing importance of sales tax and other indirect taxes worldwide. Income tax represents only a relatively small proportion of the taxes and duties that companies pay. The lion's share of the tax bill consists of sales tax, social security contributions and environmental levies, plus property tax. Added to this is the considerable administrative cost of completing the tax returns. The KPMG report provides concrete figures for sales tax: 82 percent of all companies polled reported that they pay between 200 million and 1 billion US dollars a year in sales tax.
Claudia Hillek, KPMG partner in Indirect Tax Services: "The fact that indirect taxes play a role in almost all international trade transactions is a major concern for the respondents in globally active companies. The complex calculation methods increase the danger of involuntary failure to comply with, or misinterpretation of, the law and administrative directives - all of which leads to considerable legal uncertainty and commensurately high entrepreneurial risks."
The study also shows that half of all CFOs estimate the importance of VAT risks in their company to be significantly higher than the risks associated with corporate taxes (38 percent). In addition, the report reveals that the respondents are aware of the sizable VAT risks they are exposed to. However, for various reasons no adequate action is taken to limit these risks.
Claudia Hillek: "It is important for companies now to sensitize their employees to the subject of VAT. In addition, they need to build up internal resources and establish a communicative exchange with the tax authorities. New technologies are helping to continually improve processes and set up effective risk management systems in the area of value added tax."
KPMG AG Wirtschaftsprüfungsgesellschaft
Marita Reuter/Thomas Blees
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