There are no winners in paper war. The refund of input tax amounts from other EU countries is a case in point. It is not uncommon for the cost of manual refund procedures to exceed the tax gain that comes out in the end. With the help of the AI-based software “VAT Returns”, however, the process can now be largely automated. Thus, refund procedures are profitable even for much lower input tax amounts than before. Kirstin Krippner, Tax Director at KPMG Austria, sees this as an opportunity for many companies to reclaim money that was previously left lying on the street. Together with Abacus Accounting Technologies, KPMG supports one of them – the world market leader for dictation solutions Speech Processing Solutions – in introducing VAT returns. Together we talk about their experiences.
“Most companies do not even apply for a refund of foreign input tax in other EU member states because it is such a time-consuming, manual process,” says Kirstin Krippner of KPMG. Anita Steyrer, Head of Finance and Accounting at Speech Processing Solutions, can confirm this from her own experience. The global market leader in intelligent speech solutions, which sells its products under the Philips brand, is constantly on the lookout for optimization potential. “We are looking for practicable solutions outside the SAP system to make the refund process more efficient,” says Steyrer. Currently, the invoice data is still being exported from SAP into an Excel file and manually edited there. After that follows the upload to FinanzOnline. That way, the effort required to find out whether it pays off to apply for an input tax refund is enormous. VAT Returns makes this process much easier, because the tool provides an overview of the available refund amounts per EU country at any time. This makes it clear at a glance whether the minimum amounts have been reached and whether a refund can be claimed during the year.
Global Sourcing with focus on the EU
Multinational companies such as Speech Processing Solutions can benefit enormously from VAT Returns. The manufacturer of speech-based hardware and software solutions was spun off from the Philips Group in 2012 and is now based in Vienna. The company has regional offices in the USA, Canada, Australia, the United Kingdom, Belgium, France and Germany and employs around 150 people worldwide. Speech Processing Solutions sources a large part of its components, development services and logistics services from abroad. Since its production sites are located in Austria and Hungary, the purchases are concentrated within the EU. Consequently, the number of relevant receipts for EU input tax refunds is substantial. In combination with a vast variety of supplier countries, this results in an exuberant process complexity.
Input tax refund with value-added
In cooperation with KPMG and Linde Verlag, Abacus Accounting Technologies has developed VAT Returns, a product that radically simplifies the refund of input tax for companies such as Speech Processing Solutions as well as for tax consultancies. The online tool processes invoice documents with the help of artificial intelligence and makes the refund application available to FinanzOnline within minutes. “What’s special about this is that you can reliably determine the amount of input tax that you can reclaim, since the entire legal framework has been fed into the system,” says Kirstin Krippner, referring to a total of over 10,000 tax rules that are integrated in the tool and constantly updated. The RV codes, i.e. the expenditure groups, are also available in the software. VAT Returns, for example, takes into account the fact that fuel receipts are fully refundable in Germany, only up to 40 percent in Italy and not at all in Denmark. Taking all of this into account, the result that the AI calculates is very reliable.
Boosting year-round liquidity
Also, by using VAT Returns claiming refunds during the year becomes much more attractive. Companies and tax consultancies gain more clarity about whether and when they reach the amount limits and can submit refund applications during the year without significant additional expense. This boosts liquidity. “Many companies are not aware of how many thousands of euros in input tax they forgo during the year, which they either do not claim at all or only once a year. There is a huge potential,” says Krippner. Since with VAT Returns there is better transparency as to which requirements are necessary for a permit, the number of supplements to the application can also be reduced considerably.
Humans and AI: Together for better results
“The success of our company is based on making the everyday work of our customers easier with the help of intelligent solutions. Internally, we want to do the same for our colleagues,” says Steyrer. The implementation of Finmatics has already greatly reduced the workload in data entry and processing. The introduction of VAT Returns is currently being prepared. As soon as the software is up and running, the input tax refund can be made in three simple steps:
- Upload the receipts
All invoices with declared EU input tax can be uploaded to the VAT Returns portal in an unorganized manner.
- Automated processing
The documents with foreign input tax are recognized and the artificial intelligence reads the invoice characteristics. Then the foreign input tax is determined and an overview of the refund amount per EU country is created.
- Completion of the RV codes and transmission to FinanzOnline
In the end, only the RV codes have to be assigned and the receipts have to be checked against the automatically extracted data. The documents are sent to FinanzOnline with a single click via XML export.
Compared to manual processing, VAT Returns speeds up the application process considerably. This frees up valuable time resources. “Then the question is: How do I invest these extra resources that have become available? Where can I create the most value-added with my time? If we ask ourselves these questions, there is yet a lot to achieve in the cooperation between AI and humans,” says Krippner.
We believe in the power of simplicity
This is what it says on the homepage of Speech Processing Solutions. And we can only agree with that. In an economic world that is becoming increasingly complex, nothing inspires more than simple solutions. “Simple solutions that free us from manual, repetitive, monotonous activities and create time for the exciting topics that no machine can handle,” adds Steyrer. When it comes to this, we share not only a corporate goal, but also a passion with Speech Processing Solutions. Thank you very much for this great cooperation and the inspiring conversation!