Value-added tax or VAT (sometimes known as a goods and services tax, or GST) is an indirect tax that is assessed based on a product or service value, as it goes through different phases of development or distribution. It is an indispensable tax to many nations and comprises a significant portion of tax revenue for many active economies.
As such, it stands to reason that many companies place a great importance on maximizing any VAT recovery through returns and rebates whenever possible to maximize profits. In this regard, HR services can be invaluable in processing returns accurately and consistently, to ensure that you are getting the right amount, and the highest portion of it.
The role of HR in the efficient recovery of VAT
Human Resource services mainly encompass advisory and supervision roles. These come into play with regards to filing proper returns by counselling employees and companies on how to navigate the administrative and even legal processes such as taxation and VAT reclaims. For more information on a company’s recovery of VAT check this out.
Below are some tips for HR professionals to improve employees’ knowledge on the recovery of VAT:
1. Tax advice and counselling
Employees can make use of extensive resources and knowledge available to HR departments with regards to the recovery of VAT. HR team's expertise on the inner workings of the tax authorities in your jurisdiction will be invaluable in strategizing on how to file your returns. Many HR providers will also offer tailor-made counselling to employees, to address any specific costs or concerns you wish to assess for return.
This advice does not only extend to individuals, but can also encompass general guidance to companies, as corporate entities or registered businesses will need to file their own tax separate of employees, and once again the knowledge provided by HR is invaluable in this endeavour.
2. Invoice monitoring and organizing for VAT recovery
The process of filing a return for the recovery of VAT differs depending on the businesses circumstances. Businesses that operate locally only need to submit a single invoice to one tax authority and communicate with them with regards to the return.
Businesses that operate across several countries will need to file across many jurisdictions, consider currency conversions and different tax codes and laws, and the filing of separate invoices that are compliant with these different authorities and knowing what claims will be entertained, and what details are invalid in different countries.
These invoices can then be archived and brought up in an organized fashion whenever required, whether for compliance purposes, for review internally or for investors. It also serves as a method for monitoring returns for discrepancies in the refund process, and using that information to recover any missing balances or to prepare for future returns more prudently.
HR Involvement is Important to Companies
Human Resources services aim to bring convenience and reliability to what can otherwise be a complicated process. It is becoming increasingly clear why HR is seen as the most efficient method of filing tax returns, as it indeed provides the best choices, all but a question away. Some reasons include the knowledge of HR experts on local and international compliance requirements and regulations, specialists to counsel on the processing phase, and years of previous data to pull up and analyze to companies and employees benefit.
About Maria Onzain
Maria Onzain is a content marketing expert writing about career, education, startups and productivity.