Process optimisation for a fast, error-free VAT refund outcome
The VAT refund process can at times be complex and time-consuming, because it covers both the tax office’s administrative procedures and the company’s internal processes. With the right process optimisation, however, these steps can be accelerated, made error-free and brought to a more efficient outcome. The following steps can be followed to optimise the VAT refund process:
Mapping the process step by step
The first step is to map every stage of the refund process clearly. This makes explicit which actions must be taken at each stage, which documents must be collected and who is responsible at each step.
Scope of service
Kick-off and document collection. Documents relating to all export transactions and domestic purchases of the exporter (invoices, customs declarations, payment receipts, etc.) are collected.
Return preparation. The tax return prepared for the VAT refund is issued correctly.
Application to the tax office. The application form is completed and submitted to the tax office together with the documents.
Tax office follow-up. The status of the tax office’s processing is monitored, and additional information requests are answered promptly where required.
Establishing a document management system
One of the greatest challenges in the VAT refund process is storing all documents in an orderly, systematic way and accessing them on time. Digital document management systems (DMS) should be used at this point. Storing and classifying documents digitally prevents incorrect applications and missing paperwork.
Digital archiving. Documents are scanned in digital form and placed in cloud storage. Each document is labelled with appropriate titles (for example, “Export Invoice”, “Payment Receipt”).
Access and updates. These digital documents should be accessible to the relevant departments or persons and updated when needed.
Traceability. It should be possible to see who uploaded each document and on which date. This is required in order to find and correct faulty paperwork.
Using automated calculation and reporting systems
One of the most critical steps in the VAT refund process is determining correctly the VAT amounts calculated on products purchased and sold. Using automated calculation tools and software instead of manual calculations reduces the error rate.
Integrated accounting software. Use software that automates VAT calculation, data entry and reporting. These systems calculate accurately the VAT paid on purchases and sales.
VAT reports and the tax return. Automated systems make it possible to generate VAT reports regularly each month or quarter and to prepare returns more quickly.
Data validation. Using automated validation tools that check whether data in the system is correct prevents incorrect entries or omissions.
Establishing a double-check system
To prevent manual errors in the document application and follow-up process, it is recommended that every stage rest on a double-check system. In this way, every transaction and document is verified by more than one person.
First check. The first check in preparing application documents is carried out by specialists in the VAT refund process.
Second check. The tax return and other paperwork are checked a second time by a certified public accountant or consultancy firm.
Final approval. Once everything is confirmed as correct, the documents receive a final approval before they are submitted to the tax office.
Establishing automated notification and tracking systems
Exporters can accelerate the process by receiving automated notifications at every stage of the VAT refund process. For example, information such as acceptance of documents, requests for additional documents or the status of the application is notified to the company automatically.
E-mail and SMS notifications. Automated e-mail and SMS notifications are provided for every stage of the VAT refund application. In this way, the company stays informed about each stage.
Online monitoring. Using an online monitoring system for applications filed with the tax office and for progress makes the process more transparent. These systems enable you to track the status of the application in real time.
Time tracking. A defined period can be set for each step, and automatic alerts can be received if the period is exceeded in the system.
Team communication and coordination
To accelerate the process, internal teams must communicate effectively. This matters at every stage, from collecting documents on time to following the application to the tax office correctly.
Digital communication tools. Communication among teams should be provided through project-specific digital tools (Slack, Microsoft Teams, etc.). On these platforms, information related to all documents and processes can be shared.
Cross-department coordination. Export, accounting and finance departments need to work in cooperation. Information flow among these departments enables the process to move forward quickly.
Collecting feedback for forward-looking improvements
At the end of the process, feedback should be collected on which stages of the refund application and follow-up caused difficulty, and improvements should be made in the light of that information.
Process review. Each time the VAT refund process is completed, its efficiency should be assessed. Points of difficulty can be identified and better solutions proposed for those stages.
Team review. At the end of the process, one-to-one reviews should be held with each team member, and feedback should be gathered on bottlenecks and areas for improvement.
Tax consultancy and outsourcing
Using professional consultancy in the VAT refund process can enable the process to move forward without errors and at speed. Advisers guide companies by following legal regulations and current legislation.
Communication with tax advisers. Exporters can remain in continuous contact with tax advisers and receive professional support at every stage.
Outsourcing. The process can be optimised through outsourcing. For example, certain document procedures or the application process can be managed by an external consultancy firm.
To manage the VAT refund process quickly and without errors, an effective optimisation strategy must be applied at every stage. Digitalisation, automation, professional support and internal team coordination increase the effectiveness of this process. Managing the relevant factors correctly throughout the process both saves time and strengthens relations with the tax office.