One of the first things every international corporation learns when opening or expanding in Latin America is that the region is very complex. From language translation issues to unique accounting principles, you are bound to run into your fair share of problems. What tax-related complications are most likely to trip up your business? Let’s take a look at the top 4 tax compliance challenges in Latin America — and how you can solve them.
#1: Calculating Taxes
One major difference that confounds many international companies is how taxes are calculated and collected in Latin America. For example, value-added taxes (VAT) are common in both Western countries and Latin American states. However, value-added taxes are calculated using many more factors in Latin America, factors that are subject to frequent change. Companies that lack robust and accurate accounting software are often forced to make manual transactions, a slow and cumbersome process.
Every single invoice, credit memo, debit memo, waybill, withholding tax certificate, and more must be submitted to a country’s tax authority as an XML file to be legally validated. Do you think basic accounting software can handle this task? You may want to think again…
#3: Legal Ledgers
Countries in Latin America require business taxes to be reported on a monthly basis — or in some cases every two weeks. While digital reporting certainly has made things somewhat easier than in the past, generating specific reports for multiple countries on a monthly or even more frequent basis can be challenging. This is especially true because countries often change what information they require to be reported with little advance warning.
#4: Tax Advice
Foreign companies that venture out into Brazil often find that when they pose the exact same tax question to two accountants, they often get two completely different answers. Welcome to Latin America!
Finding credible advisers you can trust is critical to establishing and growing your international business in the region.
How the LatamReady SuiteApp Can Help
You may have noticed a running theme throughout the 4 challenges listed above: tax rules and regulations in Latin America change — a LOT.
The information you have today may not be valid next month, next week or even tomorrow. That is why you need the LatamReady SuiteApp, the ultimate tax compliance solution for 18+ countries in Latin America.
The LatamReady SuiteApp helps extend the power of NetSuite to ensure large international companies achieve full tax compliance for their subsidiaries across the region. From E-invoicing to legal ledgers, calculating VAT to building relationships with local tax experts, the crack team at LatamReady works tirelessly every day to deliver efficient and accurate solutions that will benefit your business!
Ready to get started? Visit http://www.latamready.com or feel free to call us at +1-786-600-2641.
Ready to Grow Your Business in Latin America?