Vertex tax technology: Why add a tax engine for VAT determination

Manual tax research can be a significant cause of VAT error


Today’s multinational businesses face constant changes that affect global tax determination. Not just the ongoing regulatory changes, but business changes: including market expansion, M&A, new financial systems, and new product offerings.

With these constant changes, the process of manual tax research and updating every financial system can be a significant cause of VAT error, and a strain on in-house tax and IT. Even if the tax content is up-to-date, the native functionality in these systems often doesn’t meet the needs of a complex multinational, leaving them exposed at audit time.

Adding a tax engine to your ERP and financial systems improves your VAT process in multiple ways. A tax engine takes away the burden and cost of continuous in-house tax research, since tax content is maintained by the tax engine provider. Adding a tax engine improves VAT determination accuracy, since more relevant data elements are considered than in a native ERP calculation.

With a tax engine, there’s less IT support needed to implement VAT changes, since this can be managed by the tax specialists themselves. Using a tax engine, you can introduce consistent tax coding for a reliable, repeatable accounts payable process. You can conduct adequate real-time reporting, since the tax engine ensures VAT is calculated accurately the first time. A tax engine centralises your VAT controls, allowing for a more agile tax organisation that can scale quickly with business growth.

Adding a tax engine can reduce the overall cost of global VAT management. Integrating a tax engine with your financial systems is essential to stay ahead in today’s tax landscape. You’ll improve your end-to-end VAT processes, making it more efficient, agile, and scalable.