The Most Common VAT/Sales Tax Mistakes We See in Client Books

Tax rules vary significantly by jurisdiction, so this isn't a substitute for advice specific to where your business operates — but a handful of mistakes show up in almost every set of books we take over, regardless of location.

Applying the wrong rate. Different goods, services and customer types can carry different tax treatments, and rates change over time. A rate that was correct last year may not be correct today.

Claiming tax without valid documentation. A bank statement line item isn't sufficient support for a tax claim — a proper invoice or receipt showing the tax charged is generally required, and this is one of the first things reviewed in an audit.

Mixing up tax control accounts. Tax collected on sales and tax paid on purchases need to stay in clearly separated accounts. When they're mixed together, the net position becomes very difficult to verify — and easy to get wrong when it's time to file.

Treating cross-border or reverse-charge transactions like domestic ones. These often carry different rules entirely, and applying standard treatment to them is one of the more consequential mistakes we see, since it's rarely caught until a filing deadline forces a review.

The common thread across all of these: tax treatment depends heavily on jurisdiction, transaction type and current rules. When in doubt, verify against current official guidance or your tax advisor — don't assume last year's treatment still applies.