Indirect taxes, particularly Value Added Tax (VAT), can be extremely complex and administratively burdensome. If transactions take place between two or more countries, there may be compliance and reporting requirements in addition to identifying the actual rate of tax applicable. The rate of tax due depends on a variety of factors, including who the customer is and where the supply is made as well as what is being supplied.
Indirect tax liabilities are crystallized when the transaction takes place, so timing is critical. If a business makes a mistake, it could result in an unexpected cost, which in turn could affect profit margins. In addition to collecting underpayments of tax, the tax authorities can impose penalties and interest.
Our specialist indirect tax team has many years’ experience. We work closely with our clients to understand their businesses and help them: determine the rates of tax applicable to the transactions they undertake; establish if the VAT they are charged on expenses is recoverable; and identify when the tax is due / refundable. For single transactions (e.g., the purchase or sale of a company, business or property), we carry out due diligence and review contracts to ensure that the indirect tax positon is correctly represented. Together with our international network, we have considerable experience in reviewing international supply chains to identify areas where a VAT liability may arise and registration with the local tax authorities is required. We are also experienced in liaising with tax authorities on behalf of our clients to request rulings, register for specific taxes (principally VAT), handle any queries the tax authorities may have, etc.
Our expertise and access to our international network mean that we can assist our clients with all aspects of indirect tax to help them avoid or mitigate costly mistakes, interest and penalties.