Keeping telecom taxes and surcharges in check is the 38th reason to go beyond TEM and manage the enterprise digital footprint.
The typical TEM solution helps you keep track of all your telecom and technology assets, while managing the lifecycle of everything in the inventory. However, a question might come up about expenses that are a little harder to keep track of, and that can often fly under the radar. Think of all the small fees that are automatically calculated, and tend to be part of every bill and invoice; taxes and surcharges. A common concern among businesses is the challenge of managing telecom taxes, from mobile devices, to mobile plans, to hardware and software being purchased on a regular basis. And with the FCC’s recent talks of redefining cell phone data service as “broadband internet,” taxes surrounding mobility could get even more complex.
Thankfully, the right technology expense management solution will allocate more than just your assets. Cimpl allocates the taxes from your IT invoices to the correct charges, and even to the correct departments or cost centers. Mirroring the cost allocation measures for other IT and communications charges, allocating telecom taxes and surcharges will be done regularly and accurately. Any taxes paid on invoices for telecom and technology will be included in the AP file, and associated to the correct asset and department. In fact, depending on your level of engagement, taxes and surcharges can be validated and optimized as well.
How It All Works
While efficient TEM solutions will handle all of your tax allocation needs, you might not always be clear on how you are being taxed on your bills or you might not have enough details to correctly allocate the taxes to the right cost centers. While TEMs don’t necessarily get into the nitty gritty details of your taxes, you should keep in mind the way taxes are calculated in order to feel secure in knowing that you are being billed accurately.
Canadian taxes are calculated based on GST/PST/HST rates. It is essential to keep in mind, especially when it comes to traveling employees, that Canadian taxes are calculated depending on the two out of three rule, ordered by priority;
- The origin of the call
- The destination of the call
- The billing province
The tax rate applied will be based on the origin of the call, unless the destination is the same as the billing province. These guidelines often come in handy when bills come in where taxes look unfamiliar. When an employee travels to Vancouver (GST at 5%, and PST at 7%) for example with their wireless device from Québec (GST at 5%, and QST at 9.975%), it’s entirely possible that they’ll be taxed based on British Columbia’s tax rates as opposed to those in Québec.
As for the United States, the way taxes are calculated in telecom is a little more complex. Rather than working on a call-by-call basis, U.S. telecom taxes are calculated based on your spend. As for location, taxes vary by state. In order to come up with the appropriate tax calculation, a combination of where the origin of the call and the destination of the call is considered. One of the many benefits of TEM when it comes to taxes is that you can have everything optimized for you in order to keep costs low. During contract negotiations, TEM can help ensure that not only your billings, but also your tax calculations, are optimized and accurate depending on your location.
Another blurry area is that of telecom surcharges. Surcharges are another small fee that typically appears on telecom bills. Surcharges are fixed costs included on most telecom bills. As a fixed cost faced by just about all businesses with telecom bills, TEM can validate surcharges like any other fees. Billing discrepancies found in surcharges as well as taxes can be tracked, validated and optimized on a regular basis, at different levels depending on the kind of engagement you have with your TEM.
When it comes to managing telecom taxes, you can rest easy with Cimpl in place. Taxes and surcharges associated with your invoices will always be allocated to the right services and to the right departments, and can even be validated like any other telecom fees. With Cimpl, you can take back control of your technology and telecom costs. Maintaining an accurate inventory, saving money, and saving time are our three brand promises, and each will be made easy by outsourcing the management of your technology environment to Cimpl. If you’d like to learn more about Cimpl contact us today.
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