How to Simplify VAT Reclaim
- Last updated:
- Spend management
Co-founder, Yokoy
Year after year, companies miss out on significant amounts of money by forgoing VAT refunds.
However, with intelligent solutions playing a major role in simplifying and automating the process, the complexity of tax legislation and the high effort involved in reclaiming VAT should no longer be used as excuses.Â
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Reclaiming VAT is by no means just about small individual amounts. Even small and medium-sized companies quickly miss out on six-figure sums if they do not pursue this issue. The overall picture is even more remarkable:
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“Our research shows that companies worldwide fail to reclaim nearly 27 billion Euros,” says Ivan Bankov, Head of Solution Consultancy & Direct Sales at Taxback International, an expert in the field of VAT reclaim. “AP invoices and vendor receipts account for the majority of this, but travel expenses also play a significant role.”
Why companies are foregoing VAT reclaimsÂ
Why are companies missing out on cash and forgoing VAT refunds? There are three main reasons:
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- Complexity:Â High complexity and diversity of tax rules discourage companies from reclaiming VAT. In the DACH region alone, companies have to comply with around 2,000 rules and implement them individually for each country.
- Incorrect calculation:Â 70 percent of foreign incoming invoices contain VAT that is calculated incorrectly. The consequence: the foreign offices do not refund the tax.
- High effort:Â With regard to travel costs and expenses, 47 percent of transactions are below a value of 10 euros. It is simply not worthwhile for companies to reclaim VAT for these small amounts when they rely on manual processes.
The solution: automated spend management
There is no question that reclaiming VAT can quickly become a burden – at least if it’s based on manual work. By leveraging an intelligent spend management solution, it is now possible to completely automate this process.
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Artificial intelligence (AI) and machine learning form the basis for this. The software is thus able to automatically read the VAT on receipts and invoices, validate it, and prepare the accounting journal for correct booking and VAT reclaim, all in line with compliance regulations.
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In this way, companies will no longer miss out on any refundable amounts, while not having to assign dedicated personnel to this activity. Employees do not have to deal with repetitive tasks and have more time to focus on strategic issues.
Blog article
Reclaim VAT Automatically: How Yokoy Uses AI to Simplify VAT Recovery
Reclaiming foreign VAT (Value Added Tax) is something that’s usually complicated and a manual task. Read here how Yokoy automates VAT recovery with AI.
Vishnuram Muthuraman,
Product Marketing Manager
The approach of Yokoy and Taxback International
Together with our partner Taxback International, we make sure your VAT reclaims are as efficient as possible. To this end, we combine our AI-based spend management solution with Taxback International’s expertise and technology into an end-to-end process.
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Watch our German webinar to learn more about the benefits and the technical implementation of our solution.
Simplify your invoice management
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