Romania

Indirect Tax case study 

The client is a leading technology company, which provides innovative solutions to its clients. It is a strategic partner, delivering a wide range of services including all the required stages which its customers need: design, implementation and commissioning of technology.

Indirect Tax

Approach

In January 2007 Romania became a Member State of the European Union. As a result, both the Romanian authorities and business had to apply the complex rules on VAT and customs which exist within the EU, and to introduce the IT systems which EU law requires.  KPMG helped this company adapt its IT applications to enable management to comply with the new reporting requirements relating to VAT and customs. The client wanted advisors who could:

 

-  assess which systems, processes and procedures were relevant to the provision of VAT and customs returns by the company

-  determine how IT systems could be adapted to comply with the new rules, and

-  make the necessary changes to IT applications and test them.

 

Result

KPMG’s Tax practice was chosen because the client was attracted by:

-  our vision of the appropriate way to achieve the deliverables

-  our ability to mobilize rapidly a strong multidisciplinary team (IT Advisory and Indirect Tax Advisory)

-  our progressive use of technology to aid implementation.

 

Overall, the client was convinced that it could form an effective working relationship with KPMG.

 

Approach

KPMG supported the client by analyzing all the operations performed and advising on the fiscal implications of each operation. The main result of this phase of the project was that KPMG issued a manual presenting the fiscal implications of all the operations performed by the company. Then the IT system requirements had to be determined and the necessary upgrades carried out. A team formed of Indirect Tax and IT Advisory professionals worked together to design the IT systems’ rules and assisted the client in introducing these rules into their management IT system. The final stage of the project involved verifying whether the mechanisms to apply the new fiscal rules had been correctly installed into the company’s IT systems and whether the upgraded IT system was working properly.

 

We also conducted training for all the employees of the company who would work with the new system, making sure that for each stage of data input there was a member of staff who clearly understood the reasons behind his or her actions as well as the consequences of an error.

 

Result

KPMG helped create an IT system suited to supporting the client’s staff in determining and applying the correct fiscal treatment for the company’s operations. Our assistance helped the client define clearly everyone’s roles and responsibilities in helping to ensure the effective management of indirect tax. The client’s central tax team gained greater oversight of compliance processes and greater confidence in the accuracy of their reporting. This has added value to the business by improving the accuracy of returns and mitigating the risk of unexpected tax demands from the authorities, as well as related penalty charges.

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