8 Reasons for VAT Compliance Reporting

VAT reporting looks simple on the surface. In practice, it is a multi-step process that demands specific knowledge, careful data handling, and constant attention to changing rules. For any business operating across borders, managing this manually puts accuracy, compliance, and resources under real strain.

Why manual processes fall short

A typical VAT reporting cycle moves through eight steps: data gathering, data validation, quality checks, draft return preparation, reconciliation, review and sign-off, filing and archiving, and payment. At each stage, manual approaches introduce risk. Data pulled from multiple ERP systems must be consolidated by hand. Validation depends on individual diligence. Quality checks are often skipped under deadline pressure. Mapping errors in spreadsheet macros go undetected until a tax audit surfaces them.

The cost of assumptions

Many companies assume that data from an ERP system is accurate enough for VAT filing. That assumption is expensive. Filing a VAT return is a legal confirmation that the data is complete and correct. Without systematic checks on VAT rates, tax codes, currency, reverse charge, and VAT numbers, errors get filed and discovered later at much greater cost.

What automation changes

VAT reporting technology addresses each step in the process. Data is mapped once and collected automatically. Validations run consistently without relying on any one person's attention to detail. Draft returns are produced in both the local reporting language and English, making review faster. A central archive captures every step and every data point, so audit defense is straightforward and nothing depends on whether a specific employee is still with the company.

Keeping up with regulatory change

Global VAT rules are not standing still. More countries are moving toward real-time transactional reporting, SAF-T requirements, and pre-filled returns. Each country sets its own content and technical standards, and businesses receive little advance notice of changes. Technology that embeds these updates removes the burden of constant tax and technical research from your team.

Supporting business growth and centralisation

When a business expands into a new market or launches a new product line, local VAT reporting requirements are easy to overlook, especially without a local presence or language capability. VAT reporting technology supports centralised governance models, reduces reliance on local resources, and standardises processes across markets. The real value is not just meeting today's filing requirements. It is the ability to respond to tomorrow's business opportunity with confidence.

For tax, finance, and IT teams managing indirect tax obligations globally, this white paper by Vertex VAT Director Peter Boerhof breaks down each stage of the VAT reporting process and makes the case for technology as a practical, risk-reducing solution.

View our corresponding VAT Reporting infographic to learn more.