VAT Technology Solutions: The Must-have Requirements for Global Enterprises

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As VAT technology advances to support today’s tax-related activities and challenges, a dedicated VAT management solution is the most effective and efficient way to gain control of your VAT reporting process. 

But what are the key challenges an automated VAT solution needs to solve to make that possible at scale?

Our newly-published VAT Technology Guide examines the underlying challenges enterprises face, the must-have requirements they need from a dedicated VAT solution, and the benefits of future-proofing their processes to meet emerging digitalised reporting requirements.

First and foremost, a VAT solution must focus on solving the core data integrity problems caused by multiple unstructured spend sources inherent in many decentralised processes (e.g. multiple back office systems and applications, keeping and storing numerous spreadsheets in different branch offices and systems). 

When combined, advanced AI models and specialised tax expertise can solve these problems, improve data quality, and automate time-consuming and inefficient manual checks. Enterprise-grade VAT solutions must comply with emerging digitalised reporting requirements and meet global government demands to replace manual entry of VAT returns, such as the UK’s Making Tax Digital (MTD) VAT regulations, and in Europe, the EU Commission’s VAT in The Digital Age (ViDA) action plan.

For cross-border enterprises, a VAT solution needs to include:

• Automated and precise VAT calculation: Automatic AI and machine learning capabilities that provide a contextual-level understanding of each T&E expense, enabling accurate VAT eligibility calculation, minimising human errors and disqualified claims, and optimising reclaims. 
• VAT filing and reporting: Accurate and timely report generation and submission at the speed required to meet tax authorities’ deadlines.
• Compliance checks and validation: Identifies possible errors and anomalies in transaction data and flags them for remediation. 
• Data consolidation and integration: Automated and seamless integration with existing solutions and back-office databases to ensure unified control of the VAT management and reporting process. 
• Audit trail and documentation: Meticulous and accessible digital records of all VAT transactions and submissions to ensure an effortless, audit-ready, digital trail for full compliance and transparency.
• Built-in policy adherence: Understand at a contextual level the business expense of each invoice and expense report to comply with company VAT reclaim policies.
• Multi-jurisdiction support: Dynamically and ongoingly keeping up-to-date with all VAT rules, regulations, and interpretations in different locations and countries across Europe and globally to ease and simplify foreign and domestic VAT compliance.
• Analytics and reporting: Deliver comprehensive insights with real-time visibility and an in-depth view of transactions for accurate reporting and record keeping.
• Centralised document storage and retrieval: Documents and data are stored in one place to enable easy tracking and on-demand access to support any request for information and ensure a transparent process.

The Benefits of AI-led Digitalised VAT Compliance & Reporting

Implementing an advanced, technology-driven enterprise VAT management solution gives businesses the control they need to ensure readiness for the new compliance and reporting standards demanded by tax authorities, eliminate the burden and costs associated with manual legacy processes, and consistently optimise VAT reclaims.

But to achieve this, enterprises need a fully centralised process to extract, validate and qualify business expenses for VAT refund – and that requires a solution that gives full visibility and control to employees across departments. 

Just as important, enterprises need to ensure the utmost accuracy when validating their transactional data for reclaimable VAT. Performing this effectively at scale requires advanced AI and machine learning capabilities that can synthesise large data sets and contextualise transactions with new levels of precision.

By implementing an advanced AI-driven VAT solution, enterprises gain:

• Audit-ready and compliant VAT processes: Advanced and digital transaction processing enables comprehensive data checks and error identification to ensure accurate VAT posting and minimise audit risks.
• Cost and time savings: Reduces operational costs and saves time by eliminating the need for labour-intensive manual processes.
• Enhanced efficiency and productivity: Streamlined and automated technology-based processes free time for higher value tasks, facilitating optimal resource allocation and planning.
• Optimised VAT recovery: An inherently more accurate, efficient and compliant solution enables enterprises to recoup the maximum amount of reclaimable VAT from every employee-generated expense.
• Scalability and flexibility: Meet and manage changing demands and volume at global business scale without compromising accuracy or compliance.

Realising Your VAT Potential & Ensuring Digital Compliance with Blue dot

While reaping these benefits requires nothing less than an AI-led approach that can ensure data quality over your employee-driven transactions, most offerings in the market today use AI and machine learning models to a limited degree over some aspects of expense analysis and transaction processing. 

Blue dot has long recognised the need for a technology-first approach to VAT management and is leading the way with the first AI-led, centralised, and audit-ready platform built for global enterprises. VATBox by Blue dot combines advanced AI and Large Language Models, Generative AI capabilities, and a built-in tax compliance engine that is dynamically updated with the latest VAT and taxation rules per country. This enables a complete, contextual transactional story of each employee-generated expense, enabling enterprises to calculate VAT refund eligibility automatically and precisely while ensuring compliance across all entities and locations.

Download the full enterprise VAT Technology Guide to learn the essentials of an effective centralised and digitalised solution and how these capabilities can power unprecedented efficiencies and savings while minimising compliance and audit risks.