Nothing is certain except death and taxes (Benjamin Franklin)
National tax authorities are hungry beasts. Whether it is earned income, bonuses or even frequent flyer miles, if there is any way possible for it to be considered a financial benefit, the taxman wants a piece of the pie.
The same goes for loyalty rewards. Not very motivating for channel partner engagement if at the end of the financial year, they get stuck having to do all the annoying paperwork that goes along with earning rewards.
Taxation is one of the many things to consider when introducing a loyalty program; particularly within the framework of channel marketing. Many partners will only take part in rewards programs if the taxation of incentives is clearly and cost-neutrally regulated. In addition, the company itself can be penalized if the handling of rewards is not clearly defined.
Adding to the complexity, tax laws vary from country to country and, even then, they are constantly in flux. The tax implications can be very complex and begin to take on a dynamic all their own as the company expands its business across international borders.
For reward programs to be rewarding, taxation should be simple and straightforward, and cover the full workflow. Whether it is registering, communicating with benficieries, allocating funds or making payouts, terms and conditions should be clear and meet the tax requirements of the country in which the partner is located.
Now what if your company could pre-calculate and transfer taxes directly to the partner’s local tax authority? Some countries do allow lumpsum, third-party transfers directly into a taxpayer’s account. Not only could it improve channel partner retention, it would be one more incentive for vendors to make you their preferred supplier.
Sound like a lot of work? It is. Wouldn’t it be nice if there was partner relationship management software flexible enough to do the work usually allotted to a host of tax accountants and attorneys? It’s not just wishful thinking.
Working closely with the relevant authorities, Aximpro has designed an all-in-one software program that is agile enough to reflect the individual tax requirements within the different legal and tax frameworks of each country in the EMEA, and powerful enough to cover every step of the way to the taxman.
Sound like magic? It’s not. Give us a call and we will explain how you can bring new life to your channel incentives program.