VAT optimisation
Gone are the days when the VAT authorities spent days poring over your books—scrutinising your sales invoices, minutely examining the cash book, dissecting your purchase ledgers, and so on. In fact, as your CFO or your Controller will quickly tell you, the VAT authorities now have a sophisticated arsenal of software tools that can extract, analyse, and quickly encapsulate all the data they need to examine. They now use a systematic audit approach, based on various risk analysis models, that can provide them with a highly-detailed—and extremely accurate—read of all your transactions and procedures. But this naturally begs a couple of key questions: are you required to provide the VAT authorities with soft copies of your accounting records? And are you absolutely certain that your accounting procedures are sturdy enough to endure such inspection? Keep in mind that the VAT authorities have unfettered right-of-entry when it comes to all your accounting records, and that may cause problems if, like most companies, you are changing, evolving, and, hopefully, growing. What sort of problems? Well, you must be able to provide—whenever you are asked—the appropriate documentary evidence to substantiate all your VAT claims, and you may not have adjusted your procedures according to company changes. Indeed, your internal changes can have a direct impact on your partial exemption calculations: customs may decide that your business is liable for what it considers underpaid VAT. So, how do you optimise your VAT management systems to cope with such situations? How do you train your people to handle the day-to-day workings of your VAT compliance requirements?
If this is your situation
- You need to optimise your VAT compliance-monitoring procedures so that you can lessen the impact VAT is having on your company’s cash flow.
- You must find a way to better anticipate and manage your company’s VAT liabilities.
- You run a pan-European operation and would like integrate into your VAT systems some function that permits you to calculate the effects of individual EU “blocking orders” on your overall business efficiency.
- Your CFO suspects that your company’s VAT accounting treatments may be claiming VAT credits to which you are not entitled. You need to upgrade your systems to forestall future problems.
- You require a VAT management system upgrade that will allow you to delay declarations of VAT due on sales as well as speeding up the retrieval of VAT reclaimable on purchases.
How PwC can help you
At PwC we have a team of seasoned VAT specialists who can provide a wide assortment of innovative approaches to VAT management—approaches that can help you reduce your VAT liabilities and reduce the possibility of tax audits. By systematically optimising all of your VAT-related operations—and training your staff in the latest compliance processes and tax-calculation methods—we can show you how to deal efficiently with all your VAT issues. Plus, our IT services can assist you in either upgrading your current systems, or deploying new ones, in order to integrate your entire VAT compliance procedures into your company’s administrative functions. At PwC, our VAT teams will work with you to improve your assurance processes so that you can ensure that you are always in compliance with both EU directives and changes in the VAT systems of foreign countries in which you do business. And, we can also bring you up to speed on the latest negotiating techniques so that you can successfully parley with your VAT authorities—and show you how to avoid such situations in the future. It’s all part of our systematic approach to VAT management optimisation. Let us help you.
