How Vertex Plans to Keep Pace with Shifting Tax Regulations

⇨ Businesses cannot afford to wait for new regulations to wash over them, they must prioritize agility to keep pace with emerging regulatory changes.

⇨ Businesses must find solutions that enable agility and allow them to be proactive in responding to shifting tax regulations, both in the U.S. and in Europe.

⇨ Many SAP organizations are turning to trusted partners like Vertex to find agile, end-to-end tax compliance solutions to keep up with regulations in all jurisdictions and overcome compliance complexity.

Keeping up with tax regulations both in the U.S. and overseas is a complex process for SAP organizations. As tax rates change and compliance requirements shift, many businesses struggle to keep pace. Growing complexity in compliance management, governance, and regulations is deeply affecting tax strategies within SAP companies.

Companies must find solutions that keep them on the cutting edge of tax compliance. Businesses cannot afford to wait for new regulations to wash over them, they must prioritize agility to keep pace with emerging regulatory changes.

What’s Driving Indirect Tax?

To help companies find answers about the root causes of these shifts and how best to deal with them, Vertex’s Vice President of Tax Content and Chief Tax Officer Michael J. Bernard recently shared three key considerations surrounding indirect tax in 2024.

Shifting tax rates – With over 12,000 different tax jurisdictions within the U.S. at the city, state, country, and district level, organizations may struggle to find the correct tax rate – particularly because each sub-state jurisdiction has its own sales tax rate which are generally not published in a standard location. Companies need granular and end-to-end tax solutions to ensure compliance at every level.

Sales tax-adjacent fees – Bernard noted that the number of airport, retail services delivery, and environmental fees are growing quickly. Vertex calculates that the number of fee impositions they supported grew from about 400 to 1,400 over the past two years. Like tax rate publications, these fees are also not administered or published in a standardized manner.

VAT reform – The European Commission is calling for changes to finance and accounting activities through its VAT in the Digital Age (ViDA) reform package. With new e-invoicing requirements potentially coming as soon as 2028, companies operating in the EU should be on the lookout for new compliance requirements and take steps to prepare for whatever is coming on the horizon.

Conclusion

With these and other factors affecting tax management, the only thing that is certain is uncertainty. Businesses must find solutions that enable agility and allow them to be proactive in responding to shifting tax regulations, both in the U.S. and in Europe.

Many SAP organizations are turning to trusted partners like Vertex to find agile, end-to-end tax compliance solutions to keep up with regulations in all jurisdictions and overcome compliance complexity.