Reply: The impact of VAT compliance on business

PwC -survey
The impact of VAT compliance on business

Results in summary

• VAT is the predominant form of consumption tax system used around the world.


• On average it takes the case study company longer to comply with VAT around the world, than to comply with corporate income tax.
  
  
• The time needed to comply with VAT varies considerably around the world and even between neighbouring countries.


• It generally takes less time to comply with VAT in the developed world than in developing countries.


• VAT compliance tends to be more time-consuming in countries where indirect taxes are not administered by the same tax authority that deals with corporate income tax.


• Administrative procedures vary from country to country and these have a significant impact on how long it takes to comply with VAT.


• It takes less time to comply, on average, in countries where business uses online filing and payment for VAT.


• The frequency with which VAT returns are required (monthly/ quarterly), and the amount of information requested has a significant impact on the time it takes to comply.


• Compliance takes longer where extra documentation has to be submitted with the return.


• There is a correlation between the VAT compliance burden and the time delay in receiving a VAT refund. Typically, where it takes longer to receive a refund, it takes longer to comply.