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Are localizations a “walk in the park”?

Tuesday, November 12, 2013

Localizations are often underestimated in regards to the functional impact on corporate financial solutions. But more importantly, what is often underestimated is the effort required to stay up to date with changing requirements, especially in regards to VAT. Are there really so many changes? Yes, more than you would think…

WHat can have an impact on your country localizations? Just take a look at what is cooking today November 12th 2013 on VAT globally from TMF:

It has not been fun for France today.  Firstly, its Parliament rejected plans to cut the reduced VAT rate to 5%.  Then, the European Commission referred it to the European Court of Justice for charging reduced VAT on e-books instead of the higher rate of 19.6%.  Still, the planned standard VAT rate rise to 20% in January 2014 is still on track.

Malaysia has finally put a date in the diary for the introduction of GST.  1 Jan 2015 at 6%.  And you have to stand back and admire the taxing zeal of China.  It plans to introduce VAT on financial services and insurance in 2015.  The EU failed to do this, and instead is arguing over a Financial Transaction Tax.  Only India lets the side down this month with new delays to the introduction of GST (Goods and Services Tax).

Examples of localizations changes:

  • And as for all the other countries:
  • Australia  Rules out GST on foreign online retailers
  • China  Plans VAT on financial services and insurance
  • Colombia  Improves sales tax exemptions on exports
  • Egypt  New push for implementation of VAT over sales tax
  • EU  Plans standard VAT return for all member states 2017
  • France  Will not cut reduced VAT to 5% in 2014 as planned
  • France  Referred to ECJ court for reduced VAT on e-books
  • India  Delays to GST implementation as States renegotiate
  • India  Raises VAT return administration fee
  • Ireland  Continues 9% reduced VAT rate on tourism
  • Italy  2012 annual return deadline extended to 31 Jan 2014
  • Italy  EC to stop VAT refund bank guarantee requirement
  • Japan  Proposals for Consumption Tax on digital e-services
  • Malaysia  GST in 2015 at 6% to replace Sales and Services taxes
  • Mexico  Raises reduced VAT rate to 16% on US border
  • Netherlands  New electronic filings for VAT returns in 2014
  • New Zealand Reviews GST on foreign e-retailers
  • Portugal  VAT amnesty till end of 2013
  • Portugal  Pushes for reduced VAT rate on restaurants
  • Russia  VAT agents liable for tax
  • Serbia  Hikes reduced VAT rate from 8% to 10%
  • Ukraine  Withdraws 3% VAT cut as economy struggles

Guess my point is; don’t underestimate the VAT complexity in today’s global business. When you think you understand it – you’d better think twice – it’s not a walk in the park on a nice sunny afternoon.



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