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How tax authorities are using AI to transform VAT compliance

 

  • VAT compliance is shifting from periodic returns and retrospective audits to continuous, transaction-level monitoring. E-invoicing and real-time reporting give tax authorities structured data that AI can use to identify anomalies, missing or duplicate transactions, unusual trading patterns and higher-risk taxpayers.
  • AI is strengthening both enforcement and taxpayer services. Authorities can detect potential fraud networks and inconsistencies across invoices, VAT returns and financial data more quickly, while virtual assistants and automated case-management tools can provide faster support and allow officials to focus on complex cases.
  • Businesses should prioritise data quality, reconciliation and tax governance. E-invoicing records, ERP data, VAT returns and financial accounts must remain aligned and explainable under near-real-time scrutiny. Effective compliance will require a combination of technology, robust processes, reliable master data and experienced human oversight.

 

Source Fintua


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