Consumption taxes play a crucial role in the Americas, regardless of whether they are assessed as Value Added Tax (VAT), Goods and Sales Tax (GST), Sales and Use Tax (SUT) a Customs duty or excise tax. For tax authorities indirect taxes are an efficient and often a fair way of raising revenue and we see indirect tax revenues continue to increase as a proportion of tax take around the world. The rules, rates, interpretations and practices are also constantly changing.
For businesses, the administrative and risk burden of indirect taxes often lands heavily. Penalties are generally becoming a greater risk and the changes in indirect tax practices and rules can be difficult to keep up with. Based on these risks and the increased personal responsibility of company leaders, the subject of indirect taxes has risen up the agenda in companies to CFO and board level. Meanwhile, because indirect tax accounting can be affected by so many internal processes within a company, thinking internationally, understanding technology, the set-up of accounting systems and being able to connect with people in many parts of a business has become a crucial part of an indirect tax professional’s life as well as keeping up to date with the changes, the risks and opportunities these present.
This Guide to VAT in the Americas may be a simple first approach to understand how each country uses the system, leverages the revenue and deals with domestic and international businesses. We hope that you will find, if not all, many of the answers to your questions about VAT in this complex and no less fascinating part of the world.