When New York first passed its law defining what constitutes a “vendor” subject to collecting sales tax in the 1980’s, the idea of online shopping sounded like science fiction. In retrospect, NY may have effectively enacted the first “economic nexus” law when they drafted their definition of “vendor” to include a person who regularly or […]
VAT & B2G Reporting Newsletter: April 2018
On April 16, 2018, the European Council approved Italy’s derogation request from Articles 218 and 232 of the EU VAT Directive, bringing Italy one step closer to implementing its mandatory e-Invoicing requirement. Article 218 requires that Member States accept invoices in paper or electronic form. Article 232 provides that electronic invoice can only be used upon the consent of the recipient. Pursuant to the derogation, Italy is authorized to require vendors use and customers accept electronic invoices.
Italy believes that their e-invoicing requirement will allow them to more effectively combat fraud and evasion, boost efforts at digitalisation of their economy and simplify tax collection. The derogation shall apply from July 1, 2018 until December 31, 2021. The Italian e-invoicing requirement is slated to go into effect over several stages starting in July 2018, with a substantial number of taxpayers being impacted in January 2019.
The Director of the Dominican Tax Administration (DGII) announced that they will begin implementing an electronic invoicing (e-Invoicing) mandate, with a pilot study kicking off in January 2019. E-invoicing requirements vary from country to country and much of the relevant details on the Dominican approach are yet to be learned. We expect additional details to be released (including the relevant regulations, requirements, and technical schema) over the coming months. Today, the Dominican Republic uses fiscal printer technology as a means of ensuring retail transactions are reported to the Government and tax is properly collected. However, tax avoidance and evasion continue to be a concern and the move to a more comprehensive real-time (or near real-time) reporting requirement is not unexpected. Rather, it’s indicative of a clear global trend that was first spotted in South America but is now spreading globally. Governments are hungry for the data that allows them to ensure every penny of tax due is collected, remitted, and reported – and they are not willing to wait.
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On March 19th, the UK published a first draft of a withdrawal agreement, which although not finalized, indicates that for value-added and excise taxes, much of the status-quo with the European Union (EU) will remain until January 1, 2021.
Notably, the Draft Agreement states that the UK and the EU will agree to have the EU Directive on VAT (Council Directive 2006/112/EC) remain as the controlling doctrine for matters related to VAT, when goods are transported between the UK and the EU. This agreement would remain in effect during the transitional period, which would extend until December 31, 2020. Other provisions of the Draft Agreement address excise taxes, citizens’ rights and customs procedures. The Draft Agreement has been published by the UK government here.
On March 15, 2018, Finance Act 2018 was granted Royal Assent by the UK Parliament. The Act makes several changes to direct and indirect taxation in the UK, including new requirements for online marketplaces to display their VAT registration number on the marketplace and, further, an extension of joint and several liability to these types of marketplace sellers for purposes of VAT.
All of the changes made under the Finance 2018 Act can be seen here.
With recent enforcement measures, the IRS has offered definitive proof that the Affordable Care Act (ACA) is still alive and that the agency plans to strictly enforce ACA reporting. Last spring, the agency issued Letter 226J to Applicable Large Employers (ALEs) that failed to cover 95 percent of employees. ALEs are companies with 50 or […]
UPDATE (Jan. 8): Reporting season is moving forward according to plan. The IRS has announced that it will process tax returns on schedule and without delays. While the agency will clarify its contingency plan in the coming days, organizations should proceed as planned with 1099 reporting and other seasonal filings. The IRS will recall a […]
The South Dakota v. Wayfair decision last June has created a lot of angst for indirect tax professionals and the businesses they work so hard to protect from the burdens of sales and use tax filing. Six months later as we begin the new year, that angst has not gotten any lighter. Any federal legislative […]
2018 was a volatile year in indirect tax compliance for tax, finance and IT professionals worldwide. With an increase in globalization and tax gaps surpassing tens of billions in some countries, it’s not surprising that one of the biggest challenges governments are addressing is revenue collection. Like enterprises, governments are creating new, technology-driven processes to […]