VAT4U’s compliance check system helps users quickly identify documents that may be non-compliant for VAT recovery. Below, you'll find an overview of the compliance statuses, how to interpret them, and how they guide your VAT recovery process.
In VAT4U, the term "Compliance" specifically refers to the adherence of an invoice or receipt to the formal requirements in a jurisdiction for VAT deduction or recovery eligibility.
It does not pertain to other compliance topics outside of VAT recovery criteria. Always ensure that invoices meet jurisdictional standards for VAT purposes.
Compliance Statuses in VAT4U
1. Not Verified
This status means the compliance assessment has not yet been conducted for the expense. This can happen if:
The OCR (Optical Character Recognition) and “Smart Checks” weren’t started after a bulk import of data, or
OCR information isn’t yet available for the document.
If OCR and Smart Checks haven’t been run, users can start them from the Batch Actions in the Manage Expenses table. Alternatively, OCR and compliance checks run automatically if the user selects this option in the last step of the bulk import process. OCR generally processes around 100 expenses per minute.
2. Potentially Not Compliant
When VAT4U detects potential non-compliance, it assigns this status to the document.
Non-compliance reasons can vary based on the VAT refund requirements of the country of refund.
For example, if VAT4U identifies a document as a credit card slip, it will display “Credit card slip detected” as the non-compliance reason.
You can view non-compliance reasons in the Non-compliance Reason column in the Manage Expenses table and within the Data Entry module.
The current set of possible non-compliance messages includes (but is not limited to):
This seems to be a Proforma!
This seems to be not a VAT invoice or receipt
This sounds to be a Credit Card slip and might be rejected
This sounds to be an invoice copy and might be rejected
Seems like this invoice doesn't contain VAT or is not issued by a VAT payer
Potentially incorrectly charged VAT
Invoice must be addressed to the claimant company!
⚠️ Note:
These messages are continuously updated as new validation rules are introduced.
3. Looks Compliant
When no non-compliance reasons are identified, the system assigns this status.
This does not guarantee compliance, but it indicates that the document appears to meet VAT recovery requirements based on the data available.
4. Compliant / Not Compliant (User Verification Required)
In the Data Entry module, users can manually mark a document as Compliant or Not Compliant based on their own verification.
This decision overrides the system’s automated checks.
To expedite the process, users can also update compliance statuses in bulk using Batch Actions.
Keep in mind that the system’s compliance checks rely on OCR and AI, meaning accuracy may vary depending on document quality.
Compliance Check Disclaimer
The compliance check feature in VAT4U, powered by embedded AI, is designed to assist users in evaluating invoices for VAT recovery eligibility.
However, this tool does not provide a guarantee. Users remain fully responsible for verifying outputs, ensuring accuracy, and confirming compliance with jurisdictional requirements.
Always perform a thorough review before proceeding with VAT recovery claims.