IOTA Digital Workshop on "Using Efficient VAT Registration Processes to Identify Fraudulent Applications and Enhance the Customer Experience for Genuine Applicants"

This Digital Workshop looked at the good practices and experiences of IOTA Member Tax Administrations with regard to modern VAT Registration Processes. It featured an impressive lineup of speakers, including experts from the IOTA members of Azerbaijan, Estonia, Finland, Georgia, Norway, and Sweden. Participants heard from the International VAT Association (IVA) about common VAT Registration process issues, especially for non-established taxable persons, along with possible solutions and examples of good practice. They also heard from one of our business partners, Mastercard, who gave some excellent examples of parallels between VAT registration processes and the processes for merchant onboarding.

One of the first steps in promoting VAT compliance and preventing fraud is to have an effective and simple VAT registration process that makes it easy for compliant businesses to become registered, thus supporting voluntary compliance. Tax administrations are constantly refining and improving their VAT registration processes to respond to new risks, take advantage of greater access to data that allows improved risk assessment, and make use of advances in Information Technology such as AI. As such, an opportunity for administrations to learn from each other and share their experiences helps spread good practices that reduce business burdens and combat fraud, particularly those that effectively prevent fraudulent applications and ease the administrative burdens for both genuine applicants and tax administrations.

On the first day of the event, presentations covered some views from businesses on VAT registration processes and the use of data to identify potential fraud:

• International VAT Association (IVA): “VAT registration for non-established traders: the business perspective” presented by Cyrille Konter;
• Mastercard: “VAT registration processes: parallels with merchant onboarding” presented by Simon Rushforth.

The latter half of the first day was dedicated to presentations covering changes to VAT Registration processes to speed up and simplify the process for genuine applicants and reduce burdens within tax administrations. The following IOTA member administrations reflected on the topic:

• Azerbaijan: “The administration of Value Added Tax (VAT) registration” presented by Fariz Salahov;
• Estonia: “Registration of VAT liable persons (VAT register)” presented by Anu Lomp;
• Sweden:  “Risk assessment in connection with VAT registration of foreign business” presented by Vinh Hoang.

The second day of the Workshop focused on various approaches from different countries for identifying and addressing fraudulent VAT registration processes. Topics included risk assessment, the use of data, and the handling of potentially fraudulent applications once they are identified. This subject was discussed by the following IOTA member administrations:

• Norway: “Early identification of fraud in the VAT registration process” presented by Sigve Albretsen;
• Finland: “Stop VAT fraud before it happens” presented by Jarkko Liljander; 
• Georgia: “Qualified VAT taxpayer program as a tool to combat fraudulent VAT registration” presented by Lasha Zaridze.

The Workshop was very practical and was delivered through a combination of presentations, Q&A, and Group Discussion Sessions. Each Plenary Session was closed by an interactive Q&A where numerous questions were raised. All the materials, presentations, and video recordings are now available online on the event’s webpage. This Workshop was led by IOTA International Taxation Expert Jonathan Heath, with support from his colleague Massimo Morarelli.