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American companies have had access to VAT automation software for several years, even though no VAT system exists in the United States. European businesses, on the other hand, still remain largely unaware of the significant benefits that may be obtained by using technology to automate one of their biggest tax headaches. CHRIS WALSH
Curious though it may seem, American companies have had access to value-added tax tVAT] automation softuuare Coften known as VAT or tax engines for several years, even though no VAT system exists In the United States. European businesses, on the other hand, still remain largely unauuare of the significant benefits that may be obtained by using technology to automate one of their biggest tax headaches. In fact, It Is chiefly European subsidiaries of U.S. headquartered multinationals that have adopted VAT automation softuuare, usually as part of a uulder project to do the same uulth their U.S. sales and use taxes.
There are three main reasons uuhy VAT automation remains something of an unknouun quantity In Europe. First and foremost, most of the softuuare development companies uuorking In this area are based In the U.S. and to date have not made a significant effort to market their products directly to European customers. This Is changing, houuever, and there Is no doubt that S007 uulll see a greatly Increased sales drive In the European market place.
Second, there Is a broader credibility Issue involved-after all, uuhat does an American softuuare company knouu about VAT? Until recently, the ansuuer has been "not that much" but, again, things have been changing over the last tuio to three years. Some developers nouu employ European VAT specialists and partner uulth global accounting firms and consultancy companies to ensure that their products can hold up to the most rigorous testing.
The third reason Is that many companies that have implemented Enterprise Resource Planning CERP] systems such as SAP, Oracle, PeopleSoft, and JD Eduuards consider that they have already Cat least partly} automated their VAT processes. As VAT automation softuuare Is generally marketed as a bolt-on application for ERP systems, the question arises as to uuhat additional benefits the softuuare can bring over and above the native tax processing functionality of the ERP systems.
Bolt-on vs. Native Functionality
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