Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 6/15/2012

Canada - Managing indirect taxes—reducing risk, increasing cash flow 

June 15:   Indirect taxes—GST/HST and VAT—can be the third or fourth largest cash flow item for a company.

Yet compared to other large cash items, an indirect tax item tends to receive little attention from most heads of tax or chief financial officers. Indirect tax typically does not form a key metric on which senior finance executives are measured and compensated. Instead, the focus may be on income tax key performance indicators, such as an effective rate and cash rate (which are measures that have very little sensitivity to GST/HST) when assessing the efficiency and effectiveness of the tax department.


Businesses that fail to measure the performance and effectiveness of GST/HST management systems may be exposed to potential operational risks and possibly missing a big upside opportunity to improve cash flow through better management of GST/HST inflows and outflows.


To read a June 2012 report, prepared by the KPMG member firm in Canada: Reduce Risk and Increase Cash Flow with Good Indirect Tax Management




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1801 K Street NW
Washington, DC 20006.

 

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