AlfaPeople Global | Is Your Business at Risk?
3 signs it’s time to review your VAT setup.
VAT is rarely the first thing companies think about when digitalizing or expanding internationally – but it should be. Once an issue is discovered – on an invoice, in reporting, or by authorities – the consequences are often complex and costly.
VAT setup in Dynamics 365 enables accurate, automated, and scalable handling. Still, we see many mid-sized companies relying on manual processes or lacking a clear overview.
Here are three signs your business should review its VAT setup – before it becomes critical.
1. Your VAT processes are manual – and vulnerable
Are you relying on spreadsheets, post-its, and employees with “special VAT knowledge”? You’re not alone – but you are at risk.
Manual VAT handling typically leads to:
- Errors in invoices and settlements
- Missed deadlines
- Resource-heavy month-end processes and EU sales lists
- Risk of fines and duplicated work
“We still see companies where finance teams manually adjust VAT data every month – even though they use Dynamics 365,” says Benita Christensen from AlfaPeople.
It doesn’t have to be this way. With Advance Tax Calculation, VAT calculation and reporting can be automated – and the system can follow the goods, not just the transaction.
2. You’re unsure whether your VAT registrations are correct
If you store goods in Germany, manufacture in Poland, or have a distribution setup in the Netherlands, are you VAT-registered in those countries?
Many companies are not certain. That’s a problem, because VAT follows the goods, and if you have a physical presence or permanent establishment, you may have VAT obligations even without a local sales office.
As noted in The Future of Tax Administration by Accountancy Age:
“The obligation to register for VAT may arise from storage or movement of goods alone, even in the absence of commercial presence.”
Dynamics 365 can handle multiple VAT registrations per entity and apply rules based on factors such as warehouse location or delivery address – but only if configured correctly.
3. You use Dynamics 365 – but haven’t implemented Advance Tax Calculation
Dynamics 365 is one of the most flexible ERP systems for VAT handling – but only if the right components are enabled and configured.
Advance Tax Calculation is Microsoft’s modern tax engine, which:
- Enables matrix-based VAT logic
- Supports reporting across multiple countries
- Automatically applies the correct VAT based on customer type, product, and location
“We often see companies using Dynamics 365 but still relying on outdated VAT setups from the AX era. They simply don’t realize there’s a better solution available,” says Claus Andersen, Senior Presales Architect at AlfaPeople.
If Advance Tax Calculation is not enabled, you risk:
- Using outdated rules
- Creating unnecessary manual work
Falling short of future digital reporting requirements
What’s the next step?
If you recognize even one of these signs, it’s worth starting a dialogue about your VAT setup.
We can help you:
- Map your current setup
- Identify risk areas
- Assess how Advance Tax Calculation can automate and improve your VAT handling
