Could Your Company Be Missing Out on 54 percent of Tax Returns?
Mokshita P.
10x Industry

Could Your Company Be Missing Out on 54 percent of Tax Returns?

AI and machine learning are crucial for multinational companies to navigate VAT complexities, ensure compliance, and optimise tax reclaims, reducing risks and enhancing financial outcomes, says SAP Concur's João Carvalho.

Businesses can lose up to 54 percent of eligible tax returns due to a lack of expertise and experience in the tax landscape, as highlighted by SAP Concur's research. This is a significant issue, especially for multinational companies that need to manage VAT or GST for their global operations.

João Carvalho, Managing Director at SAP Concur Southern Europe, Middle East, and Africa, points out that lacking the necessary reclaim experience can lead to serious long-term risks for businesses. These risks include double taxation, unintended non-taxation, and steep penalties for non-compliance, all of which can cause major financial and compliance problems. However, these issues can be avoided by having the right resources and expertise in place.

Carvalho suggests that multinational businesses with complex tax processes should leverage technology to stay ahead of compliance issues, which will ultimately save time and money. He recommends that finance leaders use emerging technologies like machine learning and AI to tackle the challenges of reclaiming taxes effectively and ensuring compliance.

Here are four ways intelligent technology can help companies maximise their tax returns:

  1. Ease of Reclaiming from Tax Systems: VAT is a prevalent tax system in over 85 percent of countries but is complex for reclaims. Many international businesses struggle with unfamiliar reclaim processes, leading to missed opportunities to optimise their tax position. Digitalisation and understanding varying VAT rates on expenses can help reimagine VAT programs.

  2. Upskilling Teams for Compliance: Emerging technologies like AI and machine learning can streamline tax processes and facilitate seamless tax reclaims. AI can accurately identify errors and pinpoint eligible reclaims, simplifying the submission process. However, human insight is still needed to guide AI, interpret results, and make context-based decisions.

  3. Staying on Top of Shifting Regulations: Global regulation changes pose challenges for finance managers. For example, remote working has altered VAT regulations and employee spending patterns, increasing domestic VAT implications. Businesses need reliable VAT compliance solutions to mitigate risks and stay updated on regulatory changes.

  4. Accurate Data Validation: Maximising VAT recovery requires understanding why transactions are disqualified. Manual processes are error-prone, leading to disqualified claims. Implementing digital dashboards allows finance leaders to drill down into transaction-level data, identify errors, and ensure compliance. Intelligent VAT technology can optimise data collection and management.

Carvalho concludes that efficient VAT reclamation requires a strategy combining modern technologies with human oversight. This approach empowers finance leaders to understand and address tax complexities proactively. By leveraging intelligent technology, businesses can streamline VAT data management, enhance transparency, and mitigate risks, ultimately optimising their bottom line as global regulations evolve.