VAT Position & VAT Leakage Analysis
The IC Tool includes VAT calculation functionality that links intercompany pricing calculations with VAT analysis at entity and group level. VAT calculations are performed using the same intercompany transaction data and pricing outputs generated by the tool.
What the IC Tool does?
✔ Identifies VAT-relevant intercompany transaction flows
✔ Applies user-defined VAT parameters (e.g. VAT rates, recovery assumptions)
✔ Calculates VAT amounts associated with intercompany charges
✔ Aggregates 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
VAT leakage identification
Providing visibility into VAT outcomes arising from intercompany transactions, helping users identify and quantify potential VAT leakage across the group. By analysing transaction flows, entity VAT profiles, and cross-border arrangements, the tool highlights areas where VAT may be incurred but not fully recoverable, enabling proactive management and remediation.
- VAT incurred on intercompany services that may not be fully recoverable
- Structural VAT leakage driven by cross-border service arrangements
- VAT outcomes linked to the VAT status and location of group entities
Group-level VAT position
Entity-level VAT calculations, the IC Tool provides a high-level view of the group’s VAT position related to intercompany transactions. Allows VAT considerations to be reviewed alongside intercompany pricing within the same framework.
Aggregated VAT amounts across all entities
This helps users understand the overall VAT impact, identify material exposures, and assess how local VAT positions combine at group level without relying on fragmented entity-by-entity analysis.
Visibility over VAT exposure embedded in intercompany pricing
This enables users to assess whether pricing outcomes remain efficient after VAT, identify hidden VAT burdens, and make informed decisions when designing or adjusting intercompany charge models.
Alignment between intercompany charges and VAT outcomes
This helps ensure pricing, VAT treatment, and legal structure operate coherently, reducing unexpected VAT leakage and supporting consistent, defensible intercompany and tax positions.