Governance · Multinationals

From local VAT workarounds to more central governance.

Central governance does not start with a large programme. It starts with clear ownership, consistent controls and one way of working across countries.

14 March 2026 Alexander Breekpot Governance

Many multinationals still manage EU VAT through local spreadsheets, mailboxes, portal knowledge and manual corrections. That landscape has grown over time, deadlines differ by country, and nobody wants to launch a major centralisation project when the month-end close is already under pressure. At the same time, that set-up leaves the operation vulnerable: limited oversight, late visibility of errors and heavy reliance on individuals.

More central governance does not mean everything must move to one team or one system. It means bringing the parts that are currently fragmented back to a limited number of fixed choices: which data do you use, which controls do you run, who decides on exceptions, and how do you keep progress and risks per country visible. That is a different starting point from the usual situation in which each country has its own workable solution, but the whole is barely manageable as a whole.

Why this happens

Local solutions are rarely designed on purpose

In practice, VAT workarounds are usually not a strategic choice. They emerge after acquisitions, reorganisations, ERP changes or the departure of an experienced team member. A local finance manager builds an extra spreadsheet, a tax team adds a review step, and a shared service centre creates a manual mapping to get the return out the door on time. As long as the filing succeeds, it feels like enough.

The problem is that these solutions accumulate. Over time, the process comes to consist of local exceptions that individually seem logical, but in combination become opaque. The central team often knows that something is happening, but not precisely which source data is being used, where manual corrections are made or at which point a deviation can still be corrected.

The real vulnerability usually lies not in the return itself, but in the road towards it. If you cannot explain that route, the outcome also becomes harder to defend.

Where it goes wrong

The biggest risks sit in ownership and timing

In fragmented EU VAT processes, we regularly see the same patterns. There is no single clear owner of the entire chain. Source data comes from multiple systems. Controls take place late in the month. Exceptions are resolved ad hoc. And the information needed for a review is scattered across various files, emails and local folders. That makes a process not only inefficient, but also difficult to scale.

As volumes increase or more countries need to fall under the same governance, error rates rise disproportionately. The main reason is a lack of standardisation in the operation. Teams then spend a great deal of time tracing back, aligning and correcting. That time is spent keeping the existing process upright instead of improving it.

For management and internal audit, this is also a weak position. You can report that filings have been submitted, but you cannot always demonstrate on the basis of which controls and which exceptions. That is where the pressure builds when a business model changes, a country receives extra scrutiny or a tax authority starts asking more targeted questions.

What does work

More central governance can start small

Central governance does not have to begin with a new platform or a complete redesign of your VAT operation. In many cases it starts with one central calendar, one minimum set of monthly controls and one way of documenting per country. This shifts the focus from individual filings to the quality and predictability of the overall process.

The next step is usually not more technology, but simplicity. Which data elements must each country deliver at a minimum? Which deviations do you want to see before filing? Which exceptions may be resolved locally and which require a central assessment? Once that foundation is in place, you can decide more purposefully where tooling, dashboards or automation genuinely add value.

More central governance is also rarely a purely tax project. It touches tax, finance, ERP, reporting and local operations. The first step therefore needs to stay practical. Start with a workable set-up that immediately takes pressure off the monthly cycle rather than an abstract target operating model.

Practical tips

If you want to assess whether more central governance makes sense, start here:

  • For each country, make visible which source data is used, which manual steps exist and who owns them.
  • Choose three recurring controls that you want to carry out in the same way in every country, even if the rest remains local.
  • Record exceptions not only at country level, but also centrally in a single overview that remains usable across deadlines.
  • Start with two or three countries where the pressure is highest, rather than immediately opening an EU-wide programme.
  • Measure not only whether filings are on time, but also how much rework and alignment was needed to get there.

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