December 03, 2023

The benefits of enterprise resource planning (ERP) systems stretch way farther than simply managing everyday operations, such as accounting, procurement, project management, risk management, and compliance — they also assist in streamlining operations and maintaining tax and regulatory compliance.

Businesses often lack the resources to meticulously monitor the ever-changing tax and regulatory landscape in the states, countries, and regions where they conduct business. But with an ERP that’s well-maintained through appropriate tax expertise and technological solutions, you should have no problem staying organized and within compliance.

Global Tax Planning

Any company that conducts business outside the U.S. is subject to a complex series of direct, indirect, and international taxes. Maximizing profits and efficiency requires you to continually look for ways to lower your tax liability, while staying within legal and regulatory constraints. Luckily, ERP tax-compliance systems provide the infrastructure necessary for success.

When it comes to geographic expansion and corporate structure, it’s imperative that you consider all aspects of supply chain operations — especially since country tax rates and regulations affect the long-term strategic vision of an organization. Corporate tax departments constantly face an abundance of analysis and planning work, plus rarely have time to stay up to date on every jurisdictional tax-regulation change that could affect them.

As an example, when it comes to making federal updates to tax planning, Latin America (especially Brazil, Chile, and Peru) is leading the charge with such requirements as real-time validation, e-assessments and e-receipts. Having ERP software with the appropriate level of technological capability and flexibility for your organization can significantly reduce the time and costs that would otherwise be spent adapting to fluid tax regulations.

Regulatory Compliance

ERP systems can provide tax automation assistance for reporting and compliance functions. For organizations that are required to collect sales and use taxes and exemption certificates, relying on manual processes to deal with tax tables on a state-by-state basis can quickly become a logistical nightmare.

Matters only become more complex if you’re working within international compliance regulations. In the past few years, tax professionals have had to familiarize themselves with the European Commission’s Anti Tax Avoidance Directive, which requires five measures for corporate-tax transparency and compliance: the Controlled Foreign Company (CFC) rule, the switchover rule, exit taxation, interest limitation, and the general anti-abuse rule.

When it comes to tracking, allocating, and reporting corporate and VAT taxes in the EU, it pays to have an ERP that can help guide compliance.

Spinnaker Support’s Solutions

While modern ERP systems should be able to make your organizational tax planning more efficient, many fail to deliver an integrated solution. Purchasing out-of-the-box software can be too costly, and implementation may take too long, or the software simply fails to deliver on its promised benefits.

Spinnaker Support provides several global tax and regulatory compliance services, including a searchable proprietary tax database that regularly updates new regulations and country requirements. Contact our team of experts for help managing tax planning and regulatory compliance, as well as other requirements and best practices in your ERP systems.