EY Global Director of Indirect Tax
+31 88 40 71175
Welcome to Managing indirect tax refunds, our latest report on value-added tax (VAT), goods and services tax (GST) and customs and excise duties.
It examines the challenges that taxpayers face around the world in recovering foreign VAT/GST, managing domestic VAT/GST credits and obtaining customs and excise duty rebates. We also outline leading practices for avoiding and reducing excess indirect tax costs and for making successful claims.
You can download this report to read offline or share with others in your organization. You will also find a wealth of related interactive content. We hope that our comments, case studies and insights prove useful for your business.
Indirect taxes include broad-based taxes on consumption, such as VAT/GST and sales taxes; taxes on imports, such as customs duties; excise taxes; energy taxes; and environmental levies that apply to the trade or manufacture of a range of products, including alcohol, tobacco and fuel.
For most businesses, indirect taxes are intended to be “tax neutral” because they can be offset against other taxes in the supply chain or they can be included in the costs of production, distribution or sale. But in reality, these levies can create burdensome costs that must be actively managed. Unclaimed tax credits and missed or delayed refunds commonly cause negative cash flow and “tax leakage” that increase business costs and reduce profitability.
Complex local legislation, evolving business models and compliance obligations that vary widely by jurisdiction add to the complexity of making claims — and to the risk of disagreements about the validity of credits, rebates and refunds.
To manage these costs effectively, you need to take action across the organization to gain visibility into the indirect taxes you incur and clarity about how they can be refunded or offset. Ask yourself: do you know how much duty is trapped in your supply chain? Do you know how much VAT is sitting on the balance sheet? If you are expecting a refund, how realistic is that receivable? Will you receive it in full? What will it cost to claim and how long will you wait for reimbursement? Can you afford to claim? Can you afford not to? Are you missing opportunities to reduce negative balances, obtain rebates and avoid absolute costs?
The answers will help you to design an effective refund strategy that increases recovery, improves cash flow and reduces costs and risks.
At EY, we help build a better working world by advising our clients on strategically meeting their tax obligations and resolving tax controversy. We also foster an open dialogue with tax administrators, government officials and other stakeholders about tax issues, the impact of policy decisions and the contributions that companies and individuals make to society by paying the correct amount of a variety of taxes. And, where a resolution cannot be reached by other means, we can assist in developing and executing a litigation strategy.
To learn more about how you can manage indirect taxes, please contact me or one of the EY Indirect Tax professionals listed in this report.