Are you ready for the future of VAT?

The key driver in the digitalisation of VAT is the EU Commission’s ViDA (“VAT in the Digital Age”) initiative. ViDA aims to standardise digital reporting obligations and e-invoicing across Europe. This will increase the efficiency of tax processes and significantly reduce tax fraud. Companies have to prepare for these changes early to meet the new requirements and ensure they remain tax compliant.

A central aspect of VAT compliance is the quality of the master data and the scalability of the tax processes. Inaccurate or incomplete master data lead to incorrect tax calculations and increase the risk of non-compliance. The condition for automating tax processes is that the quality of the data is continually checked and improved in order to ensure accurate results.

Tax engines play a key role

VAT compliance, too, is optimised using digital solutions. Automated systems allow reports to be generated more quickly and precisely, which simplifies observing the legal provisions and has a positive effect on the tax compliance management system. Tax engines play a key role here because they automate the VAT calculation using algorithms and take into account country-specific regulations to significantly reduce errors as soon as the VAT comes about.

Finally, the use of artificial intelligence (AI) also promises to provide companies with many benefits –  including in tax compliance. KI can analyse complex tax data, recognise patterns and identify potential errors or risks. This allows companies to make their tax processes more efficient and safer and to master future challenges more successfully.

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