Indirect tax recovery: A global approach

Why a global approach matters now

 Indirect tax recovery has traditionally focused on sales and use tax (SUT) overpayments, including tax paid to vendors or self-assessed and remitted in error. That remains a practical starting point and can still be a meaningful source of near-term cash. But a broader global view can unlock more value by bringing VAT, tariffs, customs duties, and related trade activity into scope. This is especially true as better data, automation, and AI-enabled review make these opportunities more easily identifiable than in the past. 

For C-suite executives and tax leaders, a global approach is about more than expanding scope. It means aligning recovery to the realities of today’s operating model, including cross-border supply chains, centralized procurement, globally distributed operations, and ongoing shifts in sourcing and logistics. In that sense, recovery isn’t just a one-time refund exercise; it becomes a working-capital and governance play grounded in both proven results and emerging possibility.

Where the value hides: Three potential recovery opportunities

1. Sales and use tax: Recover value and address root causes

Strong sales and use tax recovery programs start with the basics. They use a reliable set of transaction data, focus on the areas where meaningful errors are likely, then review sourcing, classification, taxability, and supporting documentation in detail.

The value can be even greater when recovery efforts also address why the overpayments happened in the first place. When tax teams identify root causes and work with vendors, systems, and process owners to fix them, recovery can help prevent future leakage as well as support refund requests.

Good data is a major advantage. Clean and accurate data can make it easier to find potential recovery opportunities, prepare claims more efficiently, and support positions during review. It also helps mitigate risk across the broader indirect tax function and makes results more sustainable over time.

2. VAT: Recoverability depends on facts, structure, and documentation

Strong VAT recovery efforts start by focusing on overseas activity that may not get regular attention, especially during changes in procurement, cross-border shipping, travel, or legal entity structures. Import VAT can be especially important because it affects cash flow, and recovery often depends on identifying issues early, assessing the facts, and assembling the right support.

In practice, successful recovery requires more than identifying an overpayment. Teams need to confirm the underlying business facts, evaluate legal entity and supply chain structures, and gather the documentation needed to support recovery. Common challenges include missing import VAT certificates, ownership requirements that are not aligned to the import structure, local country rules, filing deadlines, and incomplete support. Process improvements and better data visibility can help identify these issues earlier and mitigate the risk of missed recovery.

A broader review can also help organizations improve cash flow and mitigate friction through import deferment arrangements, more tax- or duty-efficient structures, better supply chain design, and stronger coordination across tax, trade, finance, and operations. The key point for executives is that VAT recovery is often more than a filing exercise. It is a cross-functional effort supported by the right facts, documentation, processes, and data.

3. Tariffs, customs duties, and global trade: Treat recovery as part of the trade life cycle

Tariff and customs duty recovery opportunities often come up when supply chains change, trade programs are not fully used, or import declarations contain errors that affect duty paid. Even when a potential opportunity is identified, recovery depends on having accurate, traceable trade data, as well as a process that can move quickly from finding the issue to supporting the claim.

A global approach helps connect indirect tax recovery with trade and supply chain governance by bringing together transaction data, import and VAT documentation, process knowledge, and country-specific requirements into a more coordinated recovery effort. Technology can help by identifying patterns, exceptions, and potential recovery opportunities across large data sets, while improving traceability from issue identification through claim support. Combined with cross-functional coordination across tax, trade, finance, and operations, this approach can help companies spot potential opportunities earlier, reduce repeat issues, and improve visibility into where value may be leaking. That is where an integrated approach may make a difference—Deloitte can help companies link data, documentation, and remediation so organizations are better positioned not only to identify opportunities, but to convert them into realized value.

Data and technology: Building a more connected and continuous capability

A global recovery program depends heavily on the data it can mobilize. The opportunity is generally not limited to better reporting; it also involves turning complex, high-volume transactional activity into auditable, decision-useful workpapers. 

Leading organizations are using technology to automate document retrieval and extraction, connect and standardize data across systems, and enrich data sets so they’re more usable for tax analysis. AI is increasingly being used to enhance these building blocks by improving optical character recognition (OCR) on invoices and trade documents, helping standardize inconsistent fields across entities and jurisdictions, identifying anomalies and likely recovery candidates across large populations, and supporting more complete and consistent documentation for claims and audit support. 

This shift is timely as tax authorities are becoming more digital, and tax leaders are placing greater weight on automation, AI, and data quality in the operating model. Over time, it can help recovery to become less of a one-time exercise and more of a continuous capability.

A practical executive roadmap

Leaders who want to move from episodic recovery reviews to more sustained value creation should consider three opportunities for action:

To learn more about how Deloitte can help organizations move from fragmented claims activity to a more connected recovery capability, explore Deloitte’s approach to indirect tax recovery. 

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