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Innovating to keep clients ahead of tax fraudsters
PwC Global Innovation Challenge 2018 Winner. VAT fraud is a major problem – and many perfectly honest companies find themselves implicated in VAT frauds elsewhere in their supply chains. So PwC Poland has built the Tax Fraud Prevention Platform, an analytics-based tool that enables companies to assess the reliability of their contracting partners and transactions. The team won the PwC Global Innovation Challenge 2018 award for most innovative solution.
Setting the scene
Value Added Tax (VAT) fraud is one of the biggest problems facing the EU tax system.
The challenges it presents are increased by the fact that many perfectly honest companies find themselves implicated in VAT frauds that have happened elsewhere in their supply chains. If the authorities don’t think a company has carried out sufficient due diligence before doing business with someone who turns out to be a fraudster, then they can ask the company to pay back the tax that’s been lost.
To reduce this risk, businesses need smart tools to help them protect themselves from getting implicated in VAT frauds committed by suppliers or customers.
"The solution helps companies pinpoint transactions that should be subjected to closer scrutiny, because they showed some characteristics commonly associated with fraud."
How we helped
A team from PwC’s indirect taxation group in Warsaw, Poland decided to build a data analytics-based tool to help clients address VAT fraud risks. Wojciech Szulc, Director in Advisory Forensics, Jakub Kur, Manager in Advisory Forensics; Tomasz Pabianski, Director in Tax, and Kamil Olczykowski, Manager, pulled together a multi-skilled project team with world-leading expertise in tax, technology and forensic investigations.
The solution they developed – the Tax Fraud Prevention Platform – enables companies to pinpoint transactions with their contracting partners that should be subjected to closer scrutiny because they show some characteristics commonly associated with fraud.
Reflecting the potential of the solution to serve organisations across many sectors, the team integrated expertise from PwC's tax, technology and forensic investigation teams. The result was a solution that integrates three separate modules for fraud screening, focused on vendors, commodities/products, and transactions.
Today the platform is up and running with about 20 clients across Central and Eastern Europe, and is winning its first orders outside the region – with many more in the pipeline.
Impact and potential
Clients using the Tax Fraud Prevention Platform are delighted with its ground-breaking ability to automate their due diligence – capabilities that were further validated by its winning “most innovative solution” in the PwC Global Innovation Challenge 2018. What’s more, clients are already suggesting new features to add, including making it work in real time, and increasing the solution’s scalability so clients outside the EU can use it as well.
Innovation is a mindset – not a technology.
That’s why the PwC Global Innovation Challenge is commercially and client focused, leveraging what we know, through technology to deliver new ways of working, services, and products. In 2019, over 4300 innovators took part, submitting 273 solutions from 119 territories..
Innovation is in our DNA
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