VAT, sales tax, customs duty, and other similar worldwide indirect taxes typically have shorter reporting and payment time frames than direct taxes.
During disruption and downturn, US businesses should review their non-US supply chain to ensure simplifications are being applied and costs, including taxes, are minimized.
In addition, indirect taxes that are incurred outside the United States on large purchases should be reviewed to ensure they can be recovered in a reasonable time.
It’s also important to work with your vendors to minimize indirect tax cash flow issues. Indirect taxes can make up a significant proportion of working capital requirements, and managing them properly can allow you to use free cash to fund other critical business needs.