VAT GST risks - Identify and manage the risks and challenges arising from change

Page 3 of 7: Identify and manage the risks and challenges arising from change

 Root cause examples:

• A process failure (either within or outside the accounting system) to apply the correct VAT liability to a transaction (either not charging VAT when it should be, or charging VAT when it should not be)
• A failure to identify a requirement to register for VAT within a jurisdiction (establishment is often unnecessary in creating an obligation – a mere sale of goods can be sufficient to create an obligation to register for VAT);
• A failure to evidence the non-application of VAT to a transaction, e.g., lack of export documentation, etc.
• A failure to account for VAT on intercompany transactions;
• A failure to reconcile VAT turnover to AR;
• A rejection of a VAT credit through AP because of invalid documentation, e.g., the purchase invoice to support the credit was missing or defective;
• A failure to claim credit for VAT charged at importation;
• A failure to self-assess VAT on receiving services from a non-resident or transferring goods from one EU Member State to another.