Coronavirus: Contingency plans for your VAT compliance team

All VAT teams will remain busy even in this exceptional period. VAT compliance is a periodic statutory activity and work must go on despite the uncertainty over the next few weeks. VAT returns are still due and VAT compliance teams should be organized to foresee all possible scenarios.

At Marosa we have taken all relevant actions to make sure that our clients continue to receive our services.  As a small contribution to all teams handling VAT returns in Europe, we are sharing our considerations and actions around contingency plans during the Coronavirus outbreak. These are Marosa´s recommendations for your VAT team during the next few weeks:

Inmediate actions in your contingency plan

• Work from home: This is the first and easier action. VAT compliance allows you to work remotely, so we should all make use of this advantage.
• VPN connections: Most businesses protect their remote internet connections with a Virtual Private Network. The problem is that VPN connections are often limited and cannot cover the entire team working from home at the same time. Contact your VPN provider to ensure that you have enough capacity for this exceptional period.
• Postal services: When it comes to long-term remote work, this is probably the biggest challenge. Receiving post such as letters from tax authorities or sending post like VAT returns on paper (eg. regularizations in France or Swedish paper returns) require someone to be at the office. At Marosa, we organized a shared database with two sections (inbound for post to be received and outbout for post to be sent). Each employee should complete the database from their home with the expected post at the office or the letters to be sent from the office. One person should then be appointed to physically come to the office to receive and send all post  once a day.
• USB digital certificates: Another challenge are the USB certificates. Some countries like Slovenia, Luxembourg or Poland issue physical digital certificates that you need to plug to your computer each time you submit a VAT return. You should organize your team so that one person is appointed as responsible to submit all returns for one of these countries. This person would keep the USB certificate at home with him.
• External service providers:  If you use outsourced providers to submit your VAT returns, make sure that you contact them to confirm that they will be available to continue their work in case of a major quarantine period in his country.

Scenarios according to virus impact in your team

• Foresee different scenarios: Create plans according to the potential impact in your region and your team´s size. It is possible that part of the team becomes unavailable, so we recommend creating different action plans depending on the amount of persons in sick leave and the structure of your team:

• Scenarios
  Actions
• Scenario A – Less than 10% of team gets sick simultaneously
  This scenario is similar to a holiday period. You should: 1) Create backup plans; 2) distribute all VAT, ECSL and Intrastat returns among remaining team members.
• Scenario B – Between 10% and 30% of team gets sick simultaneously
  This scenario should still be covered with backup plans and a some additional actions to be considered: 1) Create backup plans; 2) Submit applications for due date deferrals in each country; 3) Add resources from non-pure VAT compliance work such as advisory, sales or internal management; 4) distribute all VAT, ECSL and Intrastat returns among remaining team members.
• Scenario C – Between 40% and 60% of the team gets sick simultaneously

  This is a critical and unlikely scenario. With these circumstances, we recommend implementing all actions listed above. 1) You should also seek additional resources outside your organization (if available). 2) Once you have a clear view on your remaining team, we recommend prioritizing the work according to risk and materiality.You should make sure that VAT returns in a payment position are submitted first. You would then submit remaining VAT returns, ECSL returns and Intrastat returns (in that order).

  When prioritizing the work, we also recommend taking into account the flexibility of each jurisdiction when assessing penalties, as some countries are likely to cancel penalties when a valid reason for the mistake is provided.

Tailor a plan to your needs and communicate internally

• Evaluate the size of your team: Smaller teams should take stricter actions sooner than bigger teams. Your contingency plan should take this into account.
• Anticipate: It is important to prepare all work ahead of time. Our team is based in Spain, so we are now fully inmersed in the Coronavirus crisis. Hopefully, you will not see Spain as far away as we used to see Italy only two weeks ago. Prepare all contingency plans now and communicate all actions to your team. A good organized plan will help reducing stress during uncertain times.
• In all the above scenarios, you should contact an outsourced service provider to evaluate additional resources and get assistance with the potential need to submit applications to defer the due date. A list of all simplifications and due date extensions is available in this article.

All the above actions and recommendations should be tailored to your team´s needs and structure. Marosa will be happy to help you drafting the Contingency plan with a clear list of actions and priorities required by your current list of obligations.

Contact us to get help drafting your contingency plans against Coronavirus.