Impact Of VAT Rate Change On Compliance Costs

Poll: Annual compliance costs of a Multinational for VAT rate changes is lower or higher than EUR 200,000

Much Lower
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Much Higher
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Around this amount
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6 years 6 months ago - 6 years 6 months ago #48 by rico
ORC International was commissioned by HMRC in 2010 to undertake research with businesses and trade associations to explore the compliance burden and commercial impact of the VAT rate change in 2008 in the United Kingdom.

In their report “ HMRC Compliance Costs and Commercial Impact of December 2008 VAT Rate Change ” ORC analysed that large businesses – businesses with more than 250 employees - spent on system change re this rate change between 235 - 4,040 hours.

If the hourly rate would be determined at EUR 75 per hour the overall system change costs would be between EUR 17,625 - EUR 303,000. Based on the definition used for large businesses it is more than likely that multinationals with multiple or complex systems will be in the higher range.

Due to the increased frequency of VAT rate changes and all the activities mentioned in SAP checklist for VAT rate changes, the costs of a multinational will likely be around EUR 50,000 and EUR 250,000 annually.

How much do you estimate that a VAT rate change costs overall?

Richard Cornelisse

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