The VAT reclaim opportunity is well understood in theory. Every finance leader in a large multinational knows that the organisation has a recoverable VAT position across its operating jurisdictions, that some portion of that position is not being reclaimed as fast as it could be, and that faster reclaim means more cash. The debate is not about whether the opportunity exists. It is about whether the investment required to capture it is justified by the return it generates — and on that question, organisations are arriving at very different answers.

One side of this debate argues that VAT reclaim optimisation is a straightforward return-on-investment decision. The cash is there. The entitlement is legal. The only question is the cost of the compliance infrastructure, the data quality investment, and the organisational change required to move from periodic reclaim management to continuous reclaim optimisation — and for most organisations of meaningful scale, the cost of that investment is significantly smaller than the value of the working capital it releases. The organisations that have done the analysis have found that the trapped VAT position is not a rounding error. It is a material working capital opportunity that has been sitting unmanaged because the tax and treasury functions have not been looking at it together.

The other side argues that the investment case is more complicated than the simple arithmetic suggests. VAT reclaim acceleration requires data quality that many organisations do not currently have — accurate, complete, correctly coded input tax data across all jurisdictions, maintained continuously rather than reviewed at period-end. Achieving that data quality requires either a significant investment in the upstream data infrastructure or a sustained programme of manual data remediation, both of which have their own cost profile. And the regulatory environment is not uniform — the jurisdictions where the largest reclaim positions accumulate are often the jurisdictions where the reclaim process is most complex, most audit-prone, and least amenable to automation.

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Rıdvan Yiğit is the Founder & CEO of RTC Suite — the world's first Autonomous Compliance and Payment Intelligence platform, built natively on SAP BTP and operating across 80+ countries.

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