VEBA's Taxes Paid By Employer

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A VEBA which has been funded to the maximum extent permitted under Code Sections 419 and 419A has its taxes paid by the employer. Would the treatment of this from the perspective of the VEBA be treated as a contribution to the VEBA by the employer followed by the payment by the VEBA of the taxes? Does it matter whether the employer pays the taxes directly or the trust pays the taxes and is reimbursed (or advanced) the amount of the taxes by the employer? If the trust is already fully funded under 419 and 419A, the concern is that the employer is making a nondeductable contribution to the trust. Or does the trust's immediate payment of the taxes effect a wash? Alternatively, is the "contribution" treated as not exceeding the VEBA's "qualified direct cost" in that the amount contributed does not exceed the benefits provided during the taxable year?