Why we invested in VATBox
VAT is a big business. In fact, there are approximately € 1.2 trillion in VAT transactions in the EU per year.
It is, in some countries, the biggest source of government income and though often thought of as “regressive” it is probably the simplest to collect and handle as it’s essentially collected by merchants. This simplicity is driving more and more countries to VAT, including China.
One of the major distinctions on VAT is the fact that it’s a tax on local consumption and therefore foreigners, as well as local businesses, are eligible for a VAT refund for certain activities. Unlike other tax brakes, VAT refunds are often times found in small increments. They are in hotel, taxi and restaurant bills and in small localized transactions. Since every country has its own local legislation, it requires local expertise. And so, companies leave the bigger part of VAT unclaimed in the EU alone.
Tax authorities worldwide are starting to grapple with the world of e-commerce and online services. An app sold to a German by an Israeli company on an Irish server owned by an American company with payments processed by a UK PSP created a myriad of complex questions about tax and VAT. But even the most compliant cooperation may find itself in a complex situation.
“To maintain compliance with existing regulations and keep up with new ones, companies are increasingly looking to tech solutions that can help streamline and manage data, processes, filings, and more.” CB Insights on #Regtech
The VAT problem screams for automation. The small increments, unstructured data and need to follow local laws create the type of challenge that big data, AI and image recognition can really make an impact on. Another interesting future perspective of VAT is the fact that the US doesn’t have it. As an entrepreneur, it’s always harder to fund and target a problem that doesn’t exist where you live and work. Silicon Vally companies, founders, and VCs merely see VAT when they go to Europe and only as a secondary problem.
VATBox, an Israeli company, therefore, started targeting the European market. With a simple solution and a great team, VATBox looks to be on the way to becoming a gold standard in the field.
The offering is simple and instinctive: give us access to your invoices and a bit more data from your ERP and VATBox will automatically get you a refund wherever you need it. It will also tell you why you are NOT getting one.
Employees aren’t taking receipts? Make it a policy!
You need to be VAT registered in some territory? Let’s get it done!
VATBox gets paid only if the client gets paid and so far, it seems like big companies are getting the message.
Shmuel Chafets @ Target Global
Anna Juliana Kletzmayr @ Target Global