A report released by PwC PricewaterhouseCoopers LLP on behalf of the European Commission, entitled VAT refunds and reimbursements: A quantitative and qualitative study, evaluates the current VAT recovery regimes operated by the EU Member States. The report found that 695,000 VAT claims totalling EUR 109.4 million were submitted in 2016, representing an increase of 12.3% since 2013. With this increase comes some frustrations and inefficiencies. The report highlights areas of difficulty regularly encountered by tax administrations and businesses and identifies opportunities for improvement.
Common issues businesses encountered by businesses when making VAT refund claim
Discussing this topic are VAT experts from multiple industries who were interviewed by Remco Dewaerheijt, VP Tax & Product Strategy at VATBox, about global VAT developments for the ”Industry Leaders Reveal” series. They offer their own personal views and professional tips to help businesses navigate the often-complex VAT marketplace.
Bas de Koning, EME Indirect Tax Manager at Bayer Crop Science, has been involved in VAT and other Indirect Tax matters for more than 20 years. Bas talks about the three most essential elements to consider when advising a company on about their VAT strategy. “Look at the processes, at the transactions, and at the risks“ advises Bas. “If you check those three elements, then you can do a perfect gap analysis, and that should be your starting point to set your priorities for the next year or the next years.”
Ilona van den Eijnde, Global Trade & Indirect Tax Advisor at E&Y, advises national and international clients regarding Customs, International Trade and Indirect Tax. Ilona shares her own tips for what to look for when advising a company on how to proceed with their VAT strategy. “I would look at how your systems are communicating, what technology solutions have been implemented, and how these systems communicate with each other. Are there any gaps between the systems and how are you managing those gaps?” Ilona also points to the familiarity of VAT within the company as a key point to consider. “Is the CEO aware of the VAT decisions that being made and how important VAT is to the business?” When asked by Remco for a third tip, Ilona offers, “I might look at the training of the people – not so much VAT technical training, which is of course also important – but make sure that your VAT [resource] also understands the IT language and how to connect with other departments within the company, not only IT but also HR, logistics and all departments. VAT is everywhere, basically.” Remco, himself an in-house VAT expert, fully agrees.
Jeroen Lassche, EMEA VAT Manager, is responsible for the in-house tax operations for a US-based biotechnology product development company with revenues of more than $24 billion and approximately 70,000 employees globally. He offers tips to fellow in-house VAT managers. “One of the first things that I would really recommend is to talk to the people within the business, in different departments. Get to know the business; what is the business doing, who are the customers, who are your suppliers? [I would also suggest finding] the opportunity to make use of technology, which will make your life easier.”
Jeroen elaborates on the benefits of technology in his discussion with Remco. He says overall business financial goals are cost reduction, headcount reduction, efficiency, and cash flow. He explains, “From a VAT perspective you can basically add to all those goals by improving processes, making them more efficient… [all by] applying technology.”
To hear more from these VAT experts about VAT tips businesses should implement and their thoughts on global VAT developments, click here.
To listen to the full individual podcasts, click here.
If you are interested in participating in our “Industry Leaders Reveal” interview series, contact us at michal.milgalter@vatbox.com
