Taxatron can shorten the VAT return process by up to weeks

How does Ramasoft’s and Andersen’s joint software facilitate the VAT declaration process via machine-to-machine connection? What services does Taxatron offer? What are the conditions of use? What are the possibilities for further development? Interview with Márton Radnai, CEO of Ramasoft.

What does Taxatron do? How do you declare VAT?

The software maps the main steps of the VAT return process. It takes the analytics and data (invoices, partner data, etc.) stored in the taxpayer’s ERP system as a basis and reads them. A multi-level verification process is then initiated, which includes checking compliance with the model and reconciliation with various external data sources. The latter are primarily NAV data sources.
Our aim was to ensure that everything that can be checked by the tax authorities is also checked in advance by Taxatron. This is an efficient solution because if corrections need to be made, they can be done within the software and there is no need for multiple rounds of communication between NAV and the taxpayer. Taxatron also supports the detection and correction of errors with several user-friendly tools.
The next step is to export the VAT return, which can then be sent to the NAV. This is of course managed by the system, as are the responses received. If for some reason the tax authority does not accept the return, there are further rounds of corrections until the package is completely error-free.

What are the conditions for using the software? What does the implementation process look like?

Taxatron is a boxed product that has to be installed on site, i.e. at the taxpayer’s premises. Its operation has some hardware software requirements, but these are not significant and can be easily overcome.
The first step in the project is to match the standard tax codes with the company tax codes, as this is the only way to meet the requirement for uniform analytics imposed by the tax authorities. As there are more of the former than the current number of VAT lines, the range of corporate tax codes will have to be extended and subdivided, which may require major changes in the corporate tax management system. Tax code mapping is a typical tax consultancy task, for which we will seek the help of our partner Andersen for each project. In this sense, implementation is a multi-stakeholder process.

How much can Taxatron shorten the VAT return process?

All taxpayers can expect to save a significant amount of time and energy by using the software, but it is difficult to quantify the savings in advance. It depends to a large extent on the size of the company and the degree of automation of the processes.
With the right preparation of the implementation and the necessary reorganisation, Taxatron can help you prepare your VAT return in as little as 1-2 days. For some companies, the tax return process can take several weeks, with the greatest time savings and efficiency gains.
When did the software development start?
We started development in the summer of 2023 and practically reached finished product status in December. The reason we were able to finish the work so quickly is because we didn’t start from scratch. Taxatron was built on top of an existing reporting system. This software has been used for years by our clients in the financial sector to fulfil their reporting and analytical data reporting obligations to the MNB. It is a different problem from a business point of view, but very similar from an IT point of view, as the same analytical data has to be provided, validated and can only be submitted if it complies with certain rules and contexts.
This was a good starting point, to which we have of course added the NAV interface, a set of new reports such as the 65A return (for testing purposes) and specific functions to support the new VAT return.

What were the main milestones in the development process?

The tax authority has drawn up a specification for both the declaration process and the interface. When it was published, we decided, on Andersen’s initiative, to take the opportunity to start a joint development project, with them contributing their tax expertise and us contributing our software development experience.
Having interpreted the NAV documents, we prepared our own functional specification, describing the business functions that the software would fulfil. Subsequently, we also participated together in the development meetings held by the tax authority, where we made a number of comments. During the autumn parliamentary session, for example, several rule changes concerning the VAT system were introduced in the Taxation Act at Andersen’s suggestion. In addition, on behalf of Ramasoft, I have also indicated where the specification of the tax administration or the approach in general could be improved.

In what direction can the software be further developed?

Our concept is to use Taxatron in the future not only to manage the VAT return process, but also to provide it with functions that support business decisions. Our medium-term plan is to make it capable of performing complex calculation tasks and simulations, even for groups of companies.
In the first round of development, we set out to try to figure out all possible customer requirements without clients. I think we succeeded. However, we have to see that the real competition in this market is only just beginning and, although we have some competitive advantage, we have to maintain it. One way to do this is to continue to develop and add new features to the software that will add further value.
Speaking of further development possibilities, it is worth mentioning that the NAV will only undertake to allow self-checks on an M2M basis from the third quarter of 2024.

Is Taxatron already prepared for this?

This will primarily be a development task for the NAV. The option can already be selected within the software to determine whether the return is to be self-assessed. Obviously, in this case we are looking at a previous period and not the current return period. In the case of a normal VAT return, the system will send a warning if there is an item in the analytics that relates to a previous period.
In terms of further developments, it is also important to note that the NAV is expected to continuously open the analytics it keeps, such as customs decisions or online cash register data, against which the analytics stored by the taxpayer can be compared. The logical thing would be for the tax authority to provide an online query interface for this, but developments in this area are still awaited.

There are some indications that, in addition to VAT, in the future all taxes can and will have to be declared via the IT system that has now been set up. Can Taxatron be easily adapted to these?

The rule changes and developments in the Hungarian tax system are indeed pointing in this direction. As I said earlier, the development of Taxatron was based on a software that, although it solved a different business problem, its operational logic made it suitable to support the M2M VAT return process. I therefore believe that the same logic, with minor or major modifications, will be effectively applied to other tax returns.

További tartalmak