Keeping up with developments in indirect taxation in the thousands of state and local jurisdictions in the U.S. is a towering task, no question, but companies that operate globally have it worse by an order of magnitude. The myriad laws governing the various sales taxes, value-added taxes, and excise duties around the world are mind-bendingly complex, and they’re in constant flux.

KPMG has been keeping a close eye on the global indirect tax scene in a series of consistently useful advisories. The firm’s midyear roundup takes a broad look at developments in over a dozen countries and throws in some discussion of technologies that are currently impacting the field.

In the section for the United States, as you might expect, the headline story is the ongoing struggle over the definition of nexus in the age of the Internet (see my blogs here and here.) Readers might be less familiar, though, with changes in the VAT rules in Germany, Spain, and the United Kingdom, as covered in the report. (Strangely enough, KPMG makes only a passing mention of the European Union’s massive restructuring of its VAT laws, a project known as the “VAT Package,” due to take effect January 1, 2010 — I’ll take up this topic in future blogs.)

On the technology side, the brief examines the state of the art in a half-dozen areas, including:

Using e-learning to help deliver improved indirect tax management. This makes all kinds of sense when you need to update tax teams scattered across the globe. And, as KPMG points out, you can recycle an e-learning module to bring new employees or transferees up to speed.

New ways to manage indirect taxes in ERP systems. Enterprise resource planning tools are the main repository of tax information for many companies, yet they’re often underused and incorrectly programmed, according to KPMG.

E-audits and VAT. Tax authorities in the EU are computerizing their audit procedures and are increasingly likely to request secure data from companies’ ERP systems for audits of VAT returns.

Implementing a global tax engine. Software packages for indirect taxes are becoming more robust, and some now offer the flexibility of reporting functionality that global tax departments require, notes KPMG. The firm recommends a bottom-up approach to implementation, with plenty of input from local tax managers; this usually works better than a top-down mandate from corporate headquarters. ###