VAT Pre-filing: AI Completes Your Forms in 5 Minutes – Automatic Population of Tax Forms Based on Your Booking Data

Why the VAT Advance Return is the Perfect Use Case for AI

The VAT advance return is basically one giant abacus. Structured data in, standardized forms out. Exactly what AI was designed for.

But why is the VAT return particularly ripe for automation?

Repetitive Task with Clear Rules

Same fields, same calculations, same transfers every month or quarter. The tax authorities have standardized the forms – perfect conditions for machine learning.

For example: Your incoming invoices end up in line 66 (input VAT from intra-community acquisitions), your outgoing invoices—depending on the tax rate—in line 81 or 86. This assignment always follows the same patterns.

High Time Investment, Low Value Creation

Be honest: how much time do you or your bookkeeper spend on the VAT return each month? In a mid-sized company, it’s easily 2–4 hours.

Time you could use for strategic tasks. Let’s face it – no one becomes an entrepreneur to fill out tax forms.

Error-Prone Manual Transfers

Every manual entry carries risk. A mistyped digit, a misassigned value, a missing receipt – and suddenly the return isn’t correct.

AI doesn’t make these types of careless errors. It calculates consistently and doesnt overlook any entries.

But a word of caution: AI is only as good as your data quality. Garbage in, garbage out – especially true in bookkeeping.

How AI-Powered Auto-Filling Works in Practice

The technology behind it is less flashy than most people think. That’s exactly what makes it so reliable.

Data Extraction from Your Accounting System

Modern AI tools connect directly to your accounting software. DATEV, Lexware, sevDesk—most systems now offer interfaces (so-called APIs).

The AI automatically pulls in booking data. No manual file transfers, no spreadsheets. Everything happens in the background.

Smart Categorization of Bookings

This is where it gets interesting: the AI analyzes your entries and automatically assigns them to the correct VAT form lines.

A real-world example: You have an invoice for €1,190 from a German supplier. The AI recognizes:

• Net amount: €1,000
• VAT: €190 (19%)
• Assignment: line 66 (input VAT from goods and services)

What used to require manual assignment now happens in milliseconds.

Automatic Calculation and Plausibility Checks

The AI doesn’t just calculate – it also checks. Do the totals add up? Are all required fields filled in? Are there any unusual variances compared to last month?

This plausibility check is worth its weight in gold. It prevents you from submitting incorrect returns.

Direct Transfer to ELSTER

The final step: The completed data is sent straight to ELSTER (the electronic tax portal in Germany). Some tools can even transmit the data automatically.

From booking to submitted VAT advance return – fully automated.

The 3 Key Requirements for Successful VAT Return Automation

Before you dive into AI automation, make sure you have these three essentials in place. Skipping them means stumbling over easily avoidable issues.

Requirement 1: Clean Data in Your Accounting

AI isn’t magic. If your bookings are incomplete or incorrectly categorized, your automated return will be wrong too.

Specifically, that means:

• Every incoming invoice must be recorded correctly
• VAT rates have to be assigned properly
• Accounts should be used with standardized logic
• All documents must be fully digitalized

Practical tip: Launch a “booking hygiene” drive before implementing AI. Clean up your accounts, standardize booking texts, correct obvious errors.

Requirement 2: Compatible Accounting Software

Not every accounting solution works with AI tools. Older on-premises systems often lack modern interfaces.

Cloud-based systems have a clear edge here:

• DATEV Unternehmen online
• Lexware accounting (cloud version)
• sevDesk
• lexoffice
• Sage Business Cloud

If you’re still running a local installation: switching to the cloud pays off—not just for AI integration.

Requirement 3: Clear Processes and Responsibilities

Automation doesn’t mean “eyes closed, full speed ahead.” You need clear ground rules:

• Who checks the automatically created VAT return?
• By when must all monthly bookings be complete?
• How do you handle special cases?
• Who’s responsible if something slips through?

My advice: Start with a parallel process. Let the AI prepare the return, but keep manually double-checking for a few months.

VAT Advance Return & AI: Which Tools Already Do It?

The market for AI-powered accounting is booming. But not all tools live up to their promises. Here’s an honest snapshot of what’s currently available.

DATEV Solutions

As market leader, DATEV has its own AI features. The “DATEV Automatisierungsservice” can create the VAT return automatically.

Advantages:

• Seamless integration with existing DATEV systems
• High data security via German servers
• Established interfaces with banks and tax authorities

Disadvantages:

• Available to DATEV clients only
• Relatively high cost
• Less flexible than specialized AI tools

Specialist AI Bookkeeping Tools

New players like Agicap, Payhawk or GetMyInvoices are shaking up the industry, building AI-first from the ground up.

These tools stand out with:

• Cutting-edge AI technology
• Intuitive operation
• Low pricing
• Rapid rollout of new features

But beware: in tax consulting, proven tech often beats something brand new. Check their compliance features closely.

Hybrid Solutions: The Best of Both Worlds

The most exciting approach right now: hybrid solutions. You stick with your current accounting software and add specialized AI modules.

Examples include:

• Finmatics for auto-receipt capture
• Candis for invoice workflows
• mindshape for AI-powered accounting automation

5-Minute Guide: Your First Automated VAT Return Step by Step

Enough theory. Here’s how to create your first AI-powered VAT return in just five minutes.

This guide works with most modern accounting tools. As an example, I’ll use a typical scenario with lexoffice.

Step 1: Make Sure All Bookings Are Entered (60 Seconds)

Before AI can do its job, all entries for the relevant period need to be in place.

Quick checklist:

1. All incoming invoices uploaded and categorized?
2. Outgoing invoices created and sent?
3. Bank transactions reconciled?
4. Cash book updated (if applicable)?

Pro tip: Use automatic bank reconciliation—it’ll save you 80% of the time here already.

Step 2: Start the AI Automation (30 Seconds)

In your accounting software, go to the “VAT Return” or “VAT Advance Return” area.

Click “Create Automatically” or “Start AI Assistant.” The label may differ by tool, but the process is basically the same.

Select the required period (month or quarter) and confirm.

Step 3: Wait for the AI Analysis (120 Seconds)

Now, the AI gets to work. It analyzes all entries and assigns them to the correct VAT form lines.

What happens behind the scenes:

• Detects applicable VAT rates (0%, 7%, 19%)
• Distinguishes domestic from foreign transactions
• Categorizes by business activity
• Calculates input and output VAT
• Checks plausibility of the results

Most tools display a progress bar. Time for a coffee.

Step 4: Review the Results (90 Seconds)

The AI presents your completed VAT return. But trust is good, checking is better.

Check this list:

1. Do the totals match your expectations?
2. Are all major transactions included?
3. Any unusual discrepancies compared to last month?
4. Are special items (asset purchases, etc.) treated correctly?

If somethings off: correct the underlying entries, not the return itself.

Step 5: Submit to the Tax Office (30 Seconds)

If everything looks good, you can submit the VAT advance return right away. Most tools offer a one-click transmission to ELSTER.

You’ll receive a confirmation with a transmission ID. Keep this safe—it’s your proof of timely submission.

Done! From data entry to submitted VAT return in five minutes.

Common Pitfalls and How to Avoid Them

AI automation is powerful, but not infallible. Based on experience, here are the usual pitfalls and how to sidestep them from the get-go.

Pitfall 1: Incomplete Receipt Capture

The number one mistake: you start the automated VAT return before capturing all receipts.

The result: your return is incomplete and must be corrected later.

How to avoid this:

• Set a firm cutoff date for document entry
• Use automatic reminders in your software
• Institute a “completion checklist”
• Train all staff involved on these processes

Pitfall 2: Incorrect Tax Treatment Assignments

AI is impressive, but not perfect. Especially with special cases, automated assignments may miss the mark.

Typical trouble spots:

• Intra-community supplies and acquisitions
• Reverse charge mechanisms
• Small-value invoices without VAT
• Travel expenses with foreign VAT

Solution: Train your AI on your specific business processes. Most tools offer learning modes, letting you use corrections as training data.

Pitfall 3: Blind Trust in Automation

The biggest risk is ironically the success of AI. If everything runs smoothly for months, people tend to let their guard down.

But then a mistake slips through – and nobody catches it.

My advice: Set up regular review routines:

1. Monthly plausibility check of results
2. Quarterly manual review by a human
3. Annual audit of AI rules and settings

Pitfall 4: Data Protection and Compliance

Cloud-based AI means your financial data leaves your organization. This isn’t an automatic problem, but it does require careful choices.

Key questions:

• Where are your data processed and stored?
• Is the provider GDPR-compliant?
• Are there industry-specific compliance requirements?
• What happens to your data after the contract ends?

Get written confirmation on these points. In tax matters, security trumps the latest AI fad.

Cost-Benefit Analysis: Is AI Worth It for Your VAT Advance Return?

The real question isn’t whether AI automation is technically possible. It’s whether it pays off for your business.

Here’s a down-to-earth look at costs and benefits.

The Cost Side: What to Expect

One-time costs:

• Software setup and configuration: €500–2,000
• Data migration and clean-up: €1,000–5,000
• Staff training: €500–1,500
• External consulting (optional): €2,000–10,000

Ongoing monthly costs:

• Software license: €50–400
• Additional AI modules: €30–200
• Support and updates: €20–100

Total: €5,000–20,000 initial investment plus €100–700 monthly.

The Benefit Side: What Do You Save?

Time savings are the biggest win. But let’s crunch the numbers:

Before (manual VAT return):

• Bookkeeper: 3 hours/month @ €25 = €75
• CEO’s review: 0.5 hours/month @ €100 = €50
• Error correction (estimated): 1 hour every 6 months @ €50 = €8

Monthly total: €133

After (AI-powered VAT return):

• Bookkeeper review: 0.5 hours @ €25 = €13
• CEO: 0.2 hours @ €100 = €20
• Error correction: virtually zero

Monthly total: €33

Savings: €100 per month = €1,200 per year

Break-Even Analysis by Company Size

Qualitative Advantages: More Than Just Saving Time

Pure cost calculations underestimate these qualitative advantages:

• Less stress: No more last-minute panic before submission deadlines
• Better cash flow planning: You know sooner how much VAT is due
• Greater accuracy: Fewer queries from the tax office
• Scalability: The system grows with your business
• Employee satisfaction: Nobody enjoys repetitive chores

My Conclusion: Who Should Go for It?

AI-driven VAT return is worthwhile if you tick at least two of these boxes:

1. You have over 100 monthly bookings
2. Your bookkeeping costs over €100 per month
3. You’re planning a software upgrade anyway
4. Compliance and accuracy are business-critical
5. You want your accounting ready for future growth

For very small businesses, automation isn’t always worth the effort yet. But the clear trend is toward more automation.

My recommendation: Start with a trial. Most vendors offer 30-day test versions. That way, you can check—risk-free—if AI-powered VAT returns work for you.

Frequently Asked Questions (FAQ)

Is the automated VAT return legally secure?

Yes, as long as your underlying entries are correct. The AI only fills out the form—the tax responsibility remains with you. A thorough review before submission is essential.

How long does it take to set up an AI-driven VAT return?

With modern cloud tools, usually 1–2 weeks. Most of the time goes into data clean-up and training the AI on your specific booking patterns. The actual software setup often takes just a few hours.

What about special cases like reverse charge or intra-community business?

Modern AI tools detect these automatically if your entries are properly categorized. For more complex situations, manual review is wise—at least at first.

Can I test several AI tools in parallel?

Yes, and it’s even recommended. Try out trial versions from different vendors with the same data. That way, you’ll quickly discover which tool fits your process best.

How much does AI-powered VAT return cost for a mid-size company?

Expect to pay €100–300 monthly for the software, plus one-off implementation costs of €5,000–15,000. For companies with over 200 bookings per month, this usually pays off within 2–3 years.