Global

Details

  • Service: Tax, Global Indirect Tax
  • Type: Business and industry issue, Video
  • Date: 10/15/2012
  • Length: 2:42 Minutes

Indirect tax management in Latin America 

Maria Menzel, Latin America Indirect Tax Director, KPMG in Switzerland:

I’m an indirect tax director for the Latin region, and I coordinate as well all the practices and the specialization in the Latin region.

What are the key tax trends?

It’s going a little bit together with the world, but we see the indirect tax rates rising a bit, we see reforms coming in different countries, challenging taxpayers, of course, but also we see a very sophisticated technology from the tax authorities and aggressive tax collection.

What can companies do?

I think that companies need to have, I would say, three basic points—or three basic areas–where they need to look at to tackle those aggressiveness tax collections and turmoils and changes in the economies and going to different territories. And I think it’s a very robust governance framework to have. They need to have a very good compliance strategy and indirect taxes being such a sticky tax everywhere. And also, to have a very good technology in place. That, I think, is the three basic pillars to function well.

What is the next step?

I think the next step is to have a specialization in Latin. To have resources which specialize in indirect taxes, because, again, indirect taxes are growing everywhere, they’re like mushrooms in all the different regions in the world. But also, the regional players in Latin are going cross-border. They are starting to work and manufacture and sell and be established in different regions of the world.

Why is technology so important?

The nature of the taxes is that tax that goes in each of the transactions of a company. Now if it’s not there, you need to ask why. So being so, there is an immense amount of cash flow going through the accounts, and everywhere is VAT, and everywhere is a sales tax, so that is why it’s so important that you need to have a specialized and customized technology in place.

What is the key message?

Have your house in order, get your house in order, and then you can think, and then you can plan.

Maria Menzel, KPMG’s Latin America Indirect Tax Director discusses how the global shift from direct to indirect taxes is resulting in a greater need to manage and measure the performance of VAT and GST
 

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