VAT tools

If your company is involved in international trade in goods with other businesses, or if your company has an online shop selling goods to businesses and/or consumers in other EU Member States, then it is imperative that you know the VAT obligations which your company has in those countries. Baker Tilly has developed an international trading tool that shows you instantly how VAT compliant your business is, and which areas could be improved.

We use our data analysis tool for municipalities to provide them with advice on better managing their VAT position. We do this by analysing the municipalities’ audit data and carrying out a wide range of checks that bring to light the risks and opportunities in terms of VAT and the VAT Compensation Fund. (BCF) Municipalities might be able to optimise their VAT position by examining these risks and opportunities. The results of the data analysis can also be used as part of the baseline measurement in a tax control framework, and contribute to agreements concerning horizontal monitoring by the tax authorities in the process.

The VAT scan gives you an overall picture of your company’s VAT position. The VAT system is far more complex than one might think. We first identify inaccuracies by carrying out a VAT scan on all the data in your financial system. The scan establishes whether the inaccuracies we identify pose a risk. It then quantifies these risks where possible, and identifies opportunities for savings. Using the conclusions from the VAT scan, we determine with you what corrections are required to reduce the risk of tax assessments, interest and fines. This makes the VAT scan an excellent tool that can be used to improve your tax risk management.

The Dutch Decree on Input VAT recovery exclusion provides for an adjustment for private use of goods and services on which the business has deducted VAT. In short, you have to make this adjustment if you have incurred expenses for private use in excess of €227 (excluding VAT) per employee/per beneficiary annually and have deducted VAT on these expenses.

Baker Tilly has developed a tool to determine whether you have to make a VAT adjustment under the decree. After entering the required data, the tool automatically calculates whether you will have to settle this adjustment with the tax authorities at the end of the year. If you want to find out more about this tool, please contact Jayant Rakhan for more information.

You may also need to analyse the amount of VAT to be repaid and why it is repayable. A baseline measurement, which checks the current position, may be the solution. You could consider extending this to developing a method that reveals errors sooner when applying the decree. Using data analysis and based on risk indicators, our consultants can verify which transactions may fall under the decree.

Managing your tax risks properly is growing in importance, particularly since the tax authorities are expecting companies to demonstrate that they are doing so. Depending on the size of your business, one of the tax authorities’ requirements could be that companies have to set up a tax control framework (TCF). A TCF is a system of processes and internal control measures that enables your business to understand and demonstrably manage tax risks. The framework also identifies your company’s tax opportunities. TCFs need to be structured properly. Baker Tilly is pleased to assist your company with setting up a TCF properly.

Some ERP systems are no longer geared to suit new business models. For instance, the basic functionalities of the ERP system may not – or no longer – adequately comply with all VAT obligations. For example, if VAT codes cannot be configured correctly, these ERP systems will not process data correctly, which can result in incorrect invoicing and/or incorrect VAT returns. If that is the case, consider engaging Baker Tilly specialists to assess the situation. We analyse the ERP system’s existing VAT processes to identify any problem areas. Our VAT consultants are highly experienced in this field and are happy to go through the solutions with you so that you can manage your VAT position properly.