Blog

Romania to Introduce SAF-T

Romania has the largest so-called “VAT gap,” the difference between actual and expected VAT revenues, in the European Union. According to a 2019 European Commission study, 36% of Romania’s VAT revenues, EUR 6.41 billion, went missing in 2017. Romania’s VAT gap reached 48% in 2011, following a sharp increase in the standard VAT rate from […]

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4 Challenges of the New India E-invoicing Mandate GSPs Can’t Solve

The deadline for the electronic invoicing mandate in India is rapidly approaching, and if multinationals aren’t careful, compliance issues could catch some SAP customers by surprise. On April 1, India will begin enforcing its own unique version of mandatory e-invoicing for all but the smallest businesses in the country, although the Indian tax administration has […]

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Romania Cancels VAT Split Payment Mechanism Effective 1 February 2020

Controls to close the VAT gap and combat VAT fraud The VAT gap for Europe remains around €137 billion every year, according to the latest report from the European Commission. This represents a loss of 11.2% of the expected VAT revenue for the region. The largest gaps were in Romania at 37.89%, Greece 33.6%, and […]

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Recent Developments: Complex Reporting Requirements in the European Union

Digital tax reporting requirements have arrived and are here to stay.  As the global VAT gap continues to grow (estimated to be as high as half a trillion EUR), countries are increasingly using complex reporting requirements to gain insight into VAT activities.  In this rapidly changing environment, it’s of utmost importance for companies to ensure […]

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“Trends” Report Excerpt: The Consequences of VAT Non-Compliance

The following is an excerpt from “Trends in Continuous Global VAT Compliance,” the 11th edition of the industry’s most comprehensive guide to e-invoicing, e-archiving and VAT reporting. The full report is available for download.  To reduce the VAT gap, countries are pushing taxable organizations to comply with VAT requirements and enforcing different types of legal […]

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Incoterms 2020: A New Coat of Paint and Important Clarifications for a New Decade

The International Chamber of Commerce (ICC) has released the new 2020 version of the Incoterms.  Incoterms are important business shorthand and understanding their express meaning and intended usage is incredibly important in minimizing business risk and ensuring compliant VAT reporting.  The following information provides some basic guidance for tax compliance professionals looking to refresh their […]

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HMRC Overhauls its Business Risk Review (BRR) Regime

HMRC administers the whole of the tax system for the UK and Northern Ireland.  Although there are some 5.7 million active businesses in the UK, less than half a percent are responsible for 40% of the tax HMRC collects (approximately £217 billion in 2017).  So, how well those businesses manage their tax compliance will make […]

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Norway to Mandate SAF-T Reporting from 2020

Mandatory SAF-T (Standard Audit File-Tax) reporting will be introduced in Norway from 1 January 2020. Use of SAF-T, a standardized XML format containing exported accounting information, remains voluntary until that date. SAF-T is designed to reduce compliance and administrative costs for businesses and revenue bodies and enhance audit outcomes.  Its standardized, easily readable layout and […]

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New Global VAT Compliance Report Provides Guidance for Multinationals

Companies are dealing with a fundamental shift in the way they do business with trading partners. In a rapidly increasing number of countries, there’s a third party inserting itself into every transaction. It’s the government, and it’s wedging its way into every order a company ships or receives.  In an effort to close a massive […]

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Poland’s Departure from the Traditional VAT Return

In Europe, Poland seems to be the first country to move away from the traditional VAT return replacing it with a detailed Standard Audit File for Tax (SAF-T). This is basically an expansion of the SAF-T system already used in Poland since 2016. Large enterprises must start working with the expanded SAF-T system from April […]

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Hungary Expands Scope of Real-Time Reporting

Since July 2018, taxpayers in Hungary have been obliged to disclose the data of electronic invoices issued for transactions with accounted VAT exceeding HUF 100,000 (approximately €300). This data must be transmitted to the National Tax and Customs Administration of Hungary (NAV) in a structured manner once the electronic invoice has been issued.  This fiscal obligation […]

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Is Your Business Ready for Turkey’s Digital Tax Transformation?

The value of data is rising The value of data is becoming more precious than oil.  Technology has transformed market dynamics across all sectors and the way businesses operate. Big data has grown in importance and data-based platforms are today’s new technology giants. On one hand; Facebook, Google and other data-based platforms are collecting data […]

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Revisiting the EU VAT “2020 Quick Fixes”

Part 4 – Call-Off Stock Arrangements This is the last in a series of four blogs providing explanatory detail to the EU’s “2020 Quick Fixes” that aim to standardise certain VAT rules throughout the EU.   Part one of this series focussed on VAT Identification of the Customer, part two provided guidance on the Exemptions of […]

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Italy to Introduce Pre-Completed VAT Returns by July 2020

The Italian government has introduced an ambitious new program for collecting VAT, under which the tax authorities will pre-populate VAT returns on behalf of taxpayers. This program is aimed at reducing the VAT gap in Italy, which reached 33.5 billion Euros in 2017 – in absolute terms, the largest loss of revenue in the European […]

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Revisiting the EU VAT “2020 Quick Fixes”

Part 3:  Chain Transactions This is the third in a series of four blogs providing explanatory detail to the EU’s “2020 Quick Fixes” that aim to standardise certain VAT rules throughout the EU. Part one of this series focussed on VAT Identification of the Customer, whilst part two provided guidance on the Exemptions of Intra-Community […]

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Revisiting the EU VAT “2020 Quick Fixes”

Part 2: The Exemptions of Intra-Community Supplies of Goods This is the second in a series of four blogs providing explanatory detail to the EU’s “2020 Quick Fixes”. This article focuses on updated guidance around the Exemption of Intra-Community Supplies of Goods coming into effect on 1 January 2020.    The EU Implementing Regulation contains a […]

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Revisiting the EU VAT “2020 Quick Fixes”

Part 1: VAT Identification of the Customer We recently wrote about the EU’s latest report on the “VAT Gap” – the overall difference between the expected VAT revenue and the amount collected by each Member State. It is hoped that the VAT Gap will be substantially reduced by the introduction of a new definitive VAT […]

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VAT Gap: EU Countries Lost €137bn in VAT Revenues in 2017

In September, the European Commission released its latest study on the so-called ‘VAT Gap’. The VAT Gap is defined as the difference between the amount of VAT collected and the VAT Total Tax Liability (VTTL), in absolute or percentage terms. The VTTL is an estimated amount of VAT that is theoretically collectable based on VAT […]

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