VAT transactions can be difficult to get right. Especially when companies are trading across several EU Member States, dealing in complex goods and services.

The fundamental issue is to make sure that transactions have been correctly understood from a VAT perspective. This is before starting to report to tax authorities. Tax authorities are desperate for revenue. So taking the time to assess new transactions and newly established supply chains should save fines; penalties; and long-term compliance costs. Companies should also ensure that they have a mechanism for checking and reviewing VAT treatments when business flows change.

Multiple operations

A leading business operating in the oil industry contacted us for specialised VAT advice. The company operates in several EU countries. They undertake projects such as transporting products, installing equipment and buying and selling products. It already obtained three VAT registrations. Separate local providers were managing the VAT compliance obligations in these countries. As a result, no one party had full visibility of the client’s overall VAT position. This left our client exposed to risk that they wanted to minimise.

How we helped

We undertook a full VAT transaction analysis review. This involved looking at the supply chains from beginning to end. We mapped these to provide transparency on what was happening. Once this work was complete, we then provided a transaction matrix. This cross-referenced those maps, easily identifying the company’s activities and related VAT treatments/obligations. This information was then used to make sure that the correct tax codes were being used in the client’s ERP system. In addition to this consultancy work, we took over the management of the three VAT registrations from the previous providers. Accordance is also in the process of obtaining a further three VAT registrations for the company that were identified as part of the consulting project.

By having one VAT provider that could review and manage VAT positions across the EU, our client was at last able to understand all its current compliance obligations and have visibility and control over their activities. This has helped to streamline its compliance processes (which has led to lower costs) and also reduce risk across the spectrum of their activities.

Need more advice with VAT transactions? Contact our VAT experts.