Over the last few decades, governments around the world have been collecting an increasing proportion of their revenues via indirect taxes. From the perspective of national treasuries, there are good reasons for this. Levied on transactions, mechanisms such as Value Added Tax (VAT) provide governments with a steady income stream throughout the financial year, while being less prone to avoidance and evasion strategies than corporation and income taxes.
When Maria Menzel joined KPMG in Switzerland, Zurich on May 2003, she brought with her a wealth of experience working in the field of indirect taxation, first as an advisor to IBM and later with accountancy to another Big Four accounting firm. Today, as a director in KPMG’s Global Indirect Tax practice (about which you can learn more here), she is based in KPMG in Switzerland’s Zurich offices, but spends around 50 percent of her time working with colleagues in Latin America, where she helps develop the Indirect Tax business in that region.
As Maria explains, demand for KPMG’s Global Indirect Tax service has been increasing across Latin America. “The economies in the region have been growing at a very fast pace,” she says. “And that has meant a lot more work for us.”
A fast-developing discipline
As has long been the case in Europe, indirect taxation is emerging as a discipline in its own right within KPMG’s Latin American member firms. “Until relatively recently, our Latin American firms kept everything together – everyone would do everything,” says Maria. “Now, there is an understanding that indirect taxation should be seen as something that is distinct.”
As such, a major part of Maria’s role is in disseminating the pooled knowledge and experience of KPMG’s global network among her Latin American colleagues. As Maria points out, much of the information and practices assembled by indirect tax practitioners around the world can be applied to the countries of South and Central America. “Tax regimes do differ,” she says. “But with the exception of Brazil, which is currently very different, there are a lot of similarities between the jurisdictions in Latin America and those in Europe.”
(You can read more about why Brazil has been recognized as one of the world’s fastest growing economies in our Spotlight on Brazil feature).
Having originally come from Argentina, Maria is ideally suited to playing an ambassadorial role and she spends a significant amount of time meeting with colleagues across Latin America and attending summits where information can be shared. However, this information traffic runs both ways. In addition to sharing global best practice, Maria gathers intelligence on local jurisdictions. “One of my jobs is to compile our country fact files,” she says.
And her own wealth of knowledge on Latin American tax issues provides a source of intelligence to her colleagues back in Europe. “I might get a call from a Partner in the German member firm with a client planning to expand into Latin America,” she says. “I can provide information on a particular country and also contacts.”
Spanning two time zones isn’t always easy. When she’s not travelling to Latin America, Maria likes to devote about two and half days a week to her European clients, and the remaining time to her global role. “The time difference has an impact on the way I work,” she says. “I usually start at around noon and stay in the office until nine at night.”
It’s a demanding role but also rewarding. “I’m dealing on a daily basis with people from a wide range of countries,” she says. “It’s an open window to the world and that is fantastic.”