VAT analytics An introduction Global VAT management of the 21st Century - EY
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VAT analytics An introduction Global VAT management of the 21st Century
1 An Introduction to VAT analytics
What we are seeing around We have built this program around
multiple service offerings. Companies have
the world different needs and levels of complexity
and corporate functions have different
In today’s fast-moving economy, companies objectives. Each service offering can be
are increasingly challenged to meet their deployed stand-alone or in combination
multiple VAT obligations around the world, with others. Our experience shows that
often using limited resources. Challenges the services suite can be adapted for any
include the large number and different type company’s circumstances.
of transactions performed.
Tax authorities around the world are also Data extraction
becoming more active and sophisticated in
their methods and frequency of auditing All services are built around solid processes
large multinational companies. These for data extraction and data quality testing
trends make managing indirect taxes more - which are key for success.
important than ever. Managing indirect tax
requires proper knowledge of and control We understand data and can support
over: companies with selecting the method of
data extraction. For companies that do not
• Data quality have access to data extraction specialists,
• ERP set-up issues we have built a data extraction tool for our
suite of services.
• Supply chain visibility
• VAT risk monitoring
• Partial manual reporting processes
• Cash flow management
• Performance measurement
Program
EY has introduced a VAT analytics program
to support global indirect tax management.
Wisdom Unstructured
VAT analytics helps local and multinational Information
companies in any industry to manage their
indirect tax positions using the company’s
data to analyze, reconcile and display risks
and opportunities.
VAT analytics allows companies to improve
their working capital and cash flow and
achieve a high level of VAT assurance.
Knowledge Data
Our VAT analytics team combines our
experience in accounting, auditing,
information technology and VAT Structured
legislation, to handle the complexity of Information
indirect tax providing companies with
higher visibility, control and assurance over
their global VAT position.
All our service offerings work with interactive
dashboards that give users overall insight into
Services suite
2
the company’s indirect tax footprint, while
Services suite
allowing users to zoom in on certain risks or
EYopportunities
offers a wide and
range
toof services
review theas part of
nature ofthe
VAT analytics methodology, all
anomalies at transaction level. built around
data diagnostics.
Dashboards
• Data from VAT return • High level analytical
report (SAP: RFUMSV00) Intake scripts
All our service offerings work with interactive
dashboards that give users overall insight into
• Invoice and master data record the company’s indirect•tax footprint,
‘All while
transactions matter’
combinations allowing users to zoom inprinciple
on certain risks
Standard or opportunities
Advanced and to review the nature of
• Standard analytical scripts • Scenario modelling
anomalies at transaction level.cause analysis
• Root
Reconcile VAT returns to: Services suite • Active controls
• Financial statements • Audit trail options
Reconcile EY offers
Monitor
a wide range•ofInteractive
services asmanagement
part of the
• Manual entries, goods, services,
cash movements VAT analytics methodology, all built around data
• Cash impact forecasting
diagnostics.
• High level analytical
Intake scripts Effectively managing
Effectively indirect
managing taxes globally
indirect has
taxes globally
neverhasbeen morebeen
never important. CompaniesCompanies
more important. want to
• ‘All transactions matter’ avoidwant
exposures andexposures
to avoid to improveand cashtoflow and cash
improve
principle working
flowcapital. What iscapital.
and working driving What
this trend?
is driving this
rd Advanced trend?
• Scenario modelling
Indirect tax regimes are expanding, rates are
• Root cause analysis
rising,Indirect
rules and
taxregulations
regimes are areexpanding,
becoming rates are
morerising,
complex. Multinationals
rules and regulationsare also
arebuilding
becoming
• Active controls complex supply chains and implementing
more complex. Multinationals are also building
• Audit trail options constant changes in their business models. At
ile Monitor complex supply chains and implementing
• Interactive management the same time, changes
constant indirect tax assessments
in their businessare models. At
• Cash impact forecasting increasing as tax authorities use sophisticated
the same time, indirect tax assessments are
tools to collect data and carry out tax audits.
increasing as tax authorities use sophisticated
Effectively managing indirect taxes globally tools to collect data and carry out tax audits.
has never been more important. Companies
VAT analytics 3
want to avoid exposures and to improve cash
flow and working capital. What is driving this
trend?
• Data from VAT return • High level analytical
Indirect tax regimes
report (SAP: are expanding, rates areIntake
RFUMSV00) scripts
rising, rules and regulations are becoming
more complex. Multinationals are also building
•complex supply
Invoice and chains
master dataand implementing • ‘All transactions matter’
constant
record combinations their business models. At
changes in principle
•the same time,
Standard indirect
analytical
Standard
tax assessments
scripts are Advanced • Scenario modelling
increasing as tax authorities use sophisticated • Root cause analysis
tools to collect data and carry out tax audits.
Reconcile VAT returns to: • Active controls
• Invoice and master data record 3 • Audit trail options
analytics
combinations Reconcile Monitor • Interactive management
• Standard analytical scripts • Cash impact forecasting3 Why VAT analytics matters
In this 21st century environment, every transaction impacts on a company’s indirect tax position
(including sales, cross border transactions and intercompany transactions). Multinationals cannot afford
to mismanage any part of their global indirect tax position. The stakes are just too high.
VAT analytics helps businesses to better structure the vital data and to quantify and assess the areas
where opportunities and risks are.
Results Business drivers
• Strong insights into the global indirect tax footprint • Understanding the VAT footprint for group
• Identification of potential cash tax savings companies under control of a central VAT function
• Improvements in working capital and cash flow • Cash optimization initiatives driven by company
management
• Root cause analysis for errors and remediation plan
• Risk management target set for tax function
• Business case for supply chain enhancements
• Identify risks and opportunities for selected group
• Ability to use data to understand indirect tax drivers
companies
of business
• Performance measurement outsourced processes
• Improved business processes
Contacts South Africa:
Redge de Swardt Tshifhiwa Mathivha
redge.deswardt@za.ey.com tshifhiwa.mathivha@za.ey.com
Cell: +27 82 776 3287 Cell: +27 81 836 2100
EY | Assurance | Tax | Transactions | Advisory
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in
the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In
so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our
organization, please visit ey.com.
© 2019 EYGM Limited.
All Rights Reserved
Creative Services ref. 4420. Artwork by A. Mokhethi.
This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional
advice. Please refer to your advisors for specific advice.
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