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Stark & costly reality: not all cloud VAT software is created equal

How many missed the true benefits of VAT automation built on modern cloud technology 

Whilst some global VAT tech providers have migrated into the cloud to meet customer scale and flexibility expectations, they have typically avoided the opportunity to rebuild to the latest architectures. Aside from missing out on the scaling, reliability and security benefits of a true cloud offering, this masks monolithic and expensive-to-support code bases.   

Kid Misso, our COO, explains the issue. Plus, how VATCalc is the world’s first tax engine and reporting VAT & GST solution to bring all the benefits of modern cloud technology on a single application.

How existing VAT offerings failed to adopt the benefits of modern cloud migrations from on-premise

Tax users will often think about the tax and functional needs they have when they are looking for tax automation. But as soon as IT get involved non-functional requirements including performance, reliability, integration, scalability, manageability and security will quickly become critically important assessment criteria. A basic appreciation of the benefits will really help business users as they are looking to understand the tax technology market.  

The stark reality is that not all cloud software is created equal. There is an enormous difference between older business systems built originally for on-premise deployment that have been ported later to the cloud, such as is the case with many existing tax engines and systems that have been built natively to make use of modern cloud technologies, such as VATCalc.  

The biggest differences are in how the processes are architected and the benefits that newer architectural approaches bring. 

Older platforms typically have large monolithic code bases that are inflexible, very hard to scale, difficult to maintain and less secure. This includes some of the early to market cloud tax technology platforms that have not modernised and still rely on large complex code bases. 

Fully modernised cloud brings low-cost scale and reliability  

Latest cloud architectures bring a huge range of benefits, delivering inexpensive flexibility and security: 

  1. Microservices: Newer platforms can benefit from loosely coupled microservices that perform discrete tasks and work together to produce the overall outcome. The powerful feature about microservices is that they can be containerised and deployed in serverless cloud systems so that each individual service can be scaled up or down instantly to respond to loads on different parts of the system. This is much faster, can handle much greater volumes and is more environmentally friendly than legacy technology implementations that require the whole system to be scaled up to meet higher demands. 
  2. Multi-tenancy: These newer systems are typically more secure than older systems because older systems were usually designed to service a single client/ account with multi-account and multi-tenancy being added later when they were repurposed to the cloud. Modern cloud systems, on the other hand, are specifically designed with multi-tenancy in mind. In addition, they are easier to secure over time since there is no reliance on out-of-date components that can’t be patched for security vulnerabilities. 
  3. Flexibility: Another benefit of this approach is an unprecedented flexibility. Since microservices are smaller and designed to do specific tasks they are easier to build and test because they are less complex and more self-contained. This results in faster development and the ability to avoid duplicating code.  
  4. API first“: Modern cloud systems typically employ an “API first” approach to services, where all services are designed first to be interacted with via a RESTful API, with other layers of the application such as user experiences leveraging the underlying APIs.  

Opening up the tax automation options 

This naturally makes integration with modern cloud technology much easier but it also is very interesting when thinking about solving different tax problems because it becomes possible to solve more types of tax problems by using the underlying services in different ways. For example, VATCalc’s return service could be used without the VATCalc user interface by an ERP company who wanted to offer VAT returns to their users through their own systems user interface but did not want to maintain all the legislation and form content or a business user who has already invested in tax determination but is unhappy with the accuracy could call our Auditor functions to review their tax determination.  

Think and invest for the upcoming digital requirements

We are all too aware of the future digitalisation of VAT determination and reporting – not least with the proposed EU VAT in the Digital Age reforms published last month. For this reason, technology flexibility will become paramount of the business user as well as in the IT team’s selection criteria.

VAT automation investments are usually made for prolonged periods, with many implementations running for a decade or more. This makes choosing a VAT technology that uses the latest cloud technology even more important because it helps companies to prepare for the future and to mitigate many of the integration, implementation, maintenance and risk concerns that they may experience with older technology.  


VATCalc is the only fully legislation-based tax services that uses modern cloud technology and that offers a single platform for VAT determination, VAT Auditor, VAT Advisor and VAT returns and filing. Contact us to find out VATCalc can help you genuinely realise the amazing benefits of VAT automation and future proof your tax function. 




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