VAT Position & VAT Leakage Analysis
The IC Tool includes VAT calculation functionality that directly links intercompany pricing calculations with VAT analysis at both entity and group level. By using the same intercompany transaction data and pricing outputs, VAT implications can be assessed consistently alongside transfer pricing outcomes, improving transparency and helping reduce misalignment between pricing results and indirect tax positions across entities, jurisdictions, and reporting cycles.
What the IC Tool does?
✔ Identifying VAT-relevant intercompany transaction flows
✔ Applying user-defined VAT parameters
✔ Calculating VAT amounts associated with intercompany charges
✔ Aggregating VAT outcomes across entities
All reconciliation logic is based on the same accounting-based dataset used for intercompany pricing and financial impact analysis.
Built for scaleups... used by:
& others
The IC Tool enables identification and quantification of potential VAT leakage arising from intercompany transactions, making VAT inefficiencies visible at transaction, entity, and structural level to support informed decision-making around intercompany pricing and service arrangements, and helping users understand where VAT costs may be non-recoverable due to operating model design, cross-border flows, or partial exemption constraints.
In addition to entity-level VAT analysis, the IC Tool provides a consolidated group-level view of VAT outcomes related to intercompany transactions, enabling VAT exposure to be reviewed alongside intercompany pricing results within a single analytical framework, and supporting consistent discussion of VAT impacts across entities while maintaining clear links back to intercompany charges, pricing logic, and underlying accounting data.
Aggregated VAT amounts across all in-scope entities, providing a consolidated view of VAT exposure arising from intercompany charges.
Visibility over VAT embedded in intercompany pricing, enabling alignment between pricing outcomes and indirect tax impacts.
Alignment of intercompany charges and VAT outcomes, supporting consistent group-level tax and financial analysis.
The IC Tool is typically used to support structured VAT analysis of intercompany arrangements, enabling identification of VAT leakage, alignment with transfer pricing outcomes, and informed decision-making for indirect tax planning and risk management, while allowing VAT considerations to be assessed using the same underlying intercompany data and assumptions applied for pricing, invoicing, and financial impact analysis.
Review of VAT implications of intercompany service and cost-recharge arrangements across entities and jurisdictions.
Identification and quantification of VAT leakage at both entity and group level.
Internal VAT analysis aligned with transfer pricing, using consistent accounting and pricing data.
Support for VAT planning and indirect tax reviews, including internal risk assessments.
What does the IC Tool VAT Leakage tool DO?
The IC Tool supports VAT analysis by applying VAT logic directly to intercompany pricing results, enabling consistent calculation, aggregation, and review of VAT outcomes using the same accounting-based dataset and analytical framework as intercompany pricing and financial impact analysis, and ensuring that VAT parameters and assumptions can be applied consistently across entities for comparable, reviewable outcomes.
Identifying VAT-relevant intercompany transaction flows based on underlying intercompany pricing calculations, ensuring VAT analysis reflects actual intercompany charging structures.
Applying user-defined VAT parameters, including applicable VAT rates, place-of-supply assumptions, and VAT recovery or partial exemption assumptions at entity level.
Calculating VAT amounts associated with intercompany charges, enabling entity-level analysis of VAT incurred or recoverable on intercompany transactions.
Aggregating VAT outcomes across entities, providing consolidated views of VAT exposure and impacts at group level.
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