Getting back to basics

The complexity of handling international Vat returns is just the kind of task that can be radically simplified using intelligent software

Joe Healy, chief strategy officer, Taxback International: ‘What makes our software key is we have our own inhouse Vat experts who build the logic in the software’

The only things that are certain in life are death and taxes, as the old Benjamin Franklin saying goes. Perhaps a third certainty is complexity, at least where taxes are concerned. And nowhere is this more the case than when dealing with differing tax regulations in multiple jurisdictions.

This complexity is precisely what Taxback International (TBI) aimed to take on when it launched its new software as a service (SaaS) solution, Comply, said Joe Healy, the company’s chief strategy officer.

“A lot of companies have done what we do for themselves. The pain point we’re resolving is that human resources, as we know, are thin on the ground. Vat and indirect tax specialists are particularly affected by this,” he said.

The fact is that even the largest of companies, such as global enterprises, struggle. The upshot of this is that Vat returns are prepared by accountants and finance teams. This is an unintentional misallocation of resources, Healy said, and can lead to serious problems.

“It stresses them and takes them away from core tasks and you run the risk of making errors,” he said.

TBI’s Comply is aimed to ease global business: “That's the beauty of the platform. A typical enterprise customer will have operations right throughout Ireland. An accountant will be very well versed in Irish Vat and perhaps a good knowledge of UK Vat, but what about other jurisdictions,” Healy said.

Indeed, once a business steps onto the continent they are suddenly dealing with different French, German, Spanish, Dutch and other regimes.

“First, there are language issues, but also the rules are different, such as what is or isn't deductible changes. How do you resource the team to do this, unless you want to hire a specialist for every country,” Healy said.

The beauty of Comply, he said, is that anyone can use it once they have been trained, thus reducing the burden on accountants. This is because the software has global Vat rules embedded in it which can then be applied to any figures entered into it.

“The requirement to be a Vat specialist is no longer there. In it you have a rules engine, which checks everything, and picks up any data or transactional issues. It then flows to a workflow where there is the ability to approve and review a Vat return,” he said.

Once a return is reviewed and approved it is then authorised for filing, providing complete transparency.

Vat in the digital age

Germany’s largest independent Vat compliance firm WTS Global, which processes tax for 95 per cent of enterprise customers in Germany on their books, noticed this and has recently signed an agreement to use Comply.

“WTS Global has 3,500 tax professionals in their company. I would call it a strategic alliance,” Healy said.

TBI, for its part, is unique in that it is not an accounting practice, having pivoted to technology about ten years ago.

“Ultimately, WTS Global saw in Comply what they wanted to deploy. Everyone is moving toward digitisation,” he said.

Indeed, given concerns about the so-called ‘Vat gap’ in the EU, where Vat is going unpaid, more and more authorities are keen to push businesses toward live, real-time reporting. On December 8 last year, the European Commission proposed a series of measures, known as Vat in the Digital Age, to modernise and make the EU’s Vat system work better for businesses and more resilient against fraud by embracing and promoting digitalisation.

Given this, Comply is coming at just the right time, Healy said.

“What makes our software key is we have our own inhouse Vat experts who build the logic in the software. A full-time team of 20 people would be needed to predicate changes in every country if you did it in-house,” Healy said.

In addition, migration is simplified and Comply can take information from all major business platforms, with Comply performing the implementation. In addition, businesses that want to hand the entire Vat process over can do so and have TBI perform it itself.

“The big implementation is around data. Are we taking it from Oracle, from Workday, from SAP? Are you confident it is all coded correctly? We support them at the implementation stage to clean the data and then it flows beautifully through the system,” Healy said.