What is "VAT Automation"?

VAT Automation is about automating all VAT relevant business processes. A distinction is drawn between:

  • Transactions (Tax determination and calculation for the billing (or invoice control) and booking)
  • Periodical routines (automated VAT return filing, Standard Audit File for Tax (SAF-T), internal reporting, etc.)
  • Master data management (tax rates, tax coding of articles, tax registration numbers, ...)

Why should businesses invest in VAT automation?

The picture below shows reasons and dependencies which help to understand the purpose of VAT automation.

Is VAT automation relevant for all businesses?

Certainly not. The bigger a company or a group of companies is and the more international business they do, the more likely they are impacted by the VAT related problems and risks. Fully automated system solutions make definitely sense for big multinationals. But even smaller companies, e.g. doing eBusiness in the EU, may easily be challenged for instance by the new rule that telecommunications, broadcasting and electronic services will always be taxed in the country where the customer belongs. The management of VAT rates of different countries, coding of which article will have which rate in country - that's where VAT automation starts.