Preheat your oven to 350°F (175°C). Grease and flour two 9-inch round cake pans.
Prepare the cake batter by mixing the cake mix, eggs, milk, and vegetable oil in a large bowl. Beat until smooth.
Fold in the sweetened shredded coconut. Divide the batter evenly between the prepared pans.
Bake for 25-30 minutes or until a toothpick inserted into the center comes out clean. Cool completely.
To make the frosting, beat cream cheese and butter together until smooth. Gradually add powdered sugar and vanilla extract, mixing well.
Fold in whipped topping until fully incorporated.
Assemble the cake by slicing each layer in half horizontally to create four layers.
Spread frosting between each layer and on top of the cake. Sprinkle toasted coconut over the top.
Refrigerate for at least 1 hour before serving.