According to research conducted by Vanson Bourne for SAP Concur, 54% of eligible Value Added Tax (VAT) is left unclaimed by businesses. That’s millions – if not billions – of dollars left on the table. Why?
The simple answer is that while VAT (also known as GST or HST, depending on the country) is recoverable in many situations, the process is a paperwork nightmare with which many companies just do not or cannot bother. . In our whitepaper, Unrecovered Tax Dollars: 5 Reasons Companies Miss the Boat on VAT/GST/HST (and how to get it back), we provide the more complex answer – five reasons, actually, why VAT goes unrecovered:
1. Businesses don’t realize that VAT can be recovered
2. Regulations are ever shifting
3. Expenses are difficult to rack and validate
4. Organizations lack the necessary time and expertise
5. Technology and processes are outdated
Not surprisingly, the COVID-19 pandemic has introduced even more compliance challenges into an already complex tax landscape. Companies have been forced to pivot their ways of doing business in order to survive financially, at times unknowingly opening themselves up to tax risk as employee spend spikes in new areas. At the same time, governments have rapidly changed VAT regulations and deferred tax deadlines in an effort to aid struggling businesses. And as the world slowly recovers from these trying times, governments are beginning to shift their attention away from relief and toward a renewed focus on audits to recover the revenue they have lost.
Together, this creates the perfect storm of confusion, additional burden, and uncertainty for finance, tax, and compliance teams around the world – making it ever more critical for businesses to have a rock-solid strategy for VAT compliance.
Getting a handle on VAT
While the whitepaper lays out some understandable reasons for leaving VAT unclaimed, it also makes a strong case for modernizing your VAT program. Organizations can – and should – recover VAT with intelligent technology, optimized data, and automated recovery processes.
The benefits of doing so go beyond recouping lost dollars. With the right solution in place, VAT-eligible expenses can be automatically and efficiently recovered, improving quality, compliance, vendor trust and reliability, and removing a massive administrative burden on your team.
To learn more about VAT recovery, download the whitepaper today.