A Quick Guide to E-invoicing and Real-Time Reporting
Tax regulations in Eastern European countries are complex but that shouldn’t be a reason not to do business there. If you’re responsible for VAT compliance, this ebook provides key details of the varying VAT digitisation mandates and business requirements across the region:
Tax administrations continue to insert themselves into the invoicing process or demand detailed records within a matter of hours or days of transactions. Many have introduced continuous transaction controls (CTCs)and are seeing the benefits of closing their country’s VAT gap and gaining granular, real-time or near real-time insight. Eastern Europe is part of this trend, moving forward rapidly with real-time reporting and e-invoicing initiatives.
Each Eastern European country has a different approach to CTCs. These differences could extend further as mandates evolve and businesses have to deal with new filing formats like SAF-T and real-time reporting to stay tax compliant. Understanding the varying demands of VAT compliance is key for any business operating in or looking to expand into the region. With this guide you’ll gain a greater understanding of the requirements across the region. Our deep dive into key countries will help you comply with VAT regulations now and prepare for upcoming mandates.
Get our guide for a comprehensive picture of CTCs in Eastern Europe and the many requirements that vary country to country. This includes invoice format, connectivity, data requirements, how to submit, archiving, legacy systems, technologies and business processes-all of which need to be reconsidered and rewired to be compliant. We also conduct extensive reviews of key Eastern European economies as well as uncover what’s on the horizon in one of the most important countries in the region, Slovakia:
The CTC landscape in Eastern Europe is constantly evolving, with countries at different stages of their journeys.
The Czech Republic, Austria, Croatia and Montenegro all currently allow post-audit invoicing.
Countries that have already implemented CTC regimes (either e-reporting or e-invoicing) where paper invoicing is still possible include Hungary, Albania and Greece.
In some cases, such as in Slovenia and Bulgaria, there are CTC schemes planned but details have yet to be specified.
Others have outlined their specifications and implemented voluntary schemes. Our guide covers some of these countries, providing details about the scope, document flows, key requirements and timelines of their regimes.
Taxpayers are required to use the Romania e-transport system to issue an e-transport document regarding the transport of high fiscal risk products before transportation of goods begins. This includes data regarding the sender, recipient, goods, places of loading and unloading and details of the means of transport and carrier.
Our unique cloud solutions keep you compliant in 60+ countries and our tax experts ensure your business complies with the latest regulations and their requirements.
Market-leading 40+ year history in global regulatory monitoring and analysis
One vendor, one technical interface
Embedded in 60+ partners (SAP, Ariba, Coupa, IBM and more)
Simple API for plug-and-play interoperability
Evolves with your technology and process choices
Creating sales tax requirements is hardly an easy task. Nor is meeting those requirements and staying compliant in an ever-evolving industry. But the continued push to digital technology makes both sides of that coin extremely difficult.
States are working to understand the proper tax treatment of digital goods such as digital books, movies and music. When you add blockchain technology into the mix, bundling endless combinations of things (such as a ticket to a sporting event or beverages from a concession stand) adds even more complexity to the sales tax perspective. Furthermore, there is a sourcing challenge when it comes to sales tax and digital assets. With blockchain, wallet addresses do not identify the physical owners of assets. That aspect of security is part of the draw.
So, what do states need to keep in mind as they start implementing (and then creating legislation for) this technology? What exactly does it mean for sales tax?
This ebook breaks down the current digital asset dilemma and discusses what legislators, regulators and businesses need to understand, such as:
The application of sales tax on digital assets transferred on blockchain is becoming an increasingly important consideration for states. Before diving headfirst into blockchain technology and digital assets, states need to be sure they are adopting best practices. That can only be done with an accurate and comprehensive understanding of the industry itself. Sellers and marketplaces are ready to comply with reasonable and well-articulated sales tax compliance requirements – they just need to be given reasonable and well-articulated requirements to follow.
State reporting requirements for 1099-NEC and 1099-MISC forms are growing increasingly complicated. Whether your business is undergoing mergers and acquisitions, working to keep pace with regulatory change or is just experiencing growth, knowing the basics of state reporting is crucial to maintaining compliance.
Tax reporting for nonemployee compensation includes both federal and individual state reporting requirements. First, there is the Combined Federal/State Filing program (CF/SF), which is an IRS program that forwards information received on to the states that participate in the program (not all states participate). There is also the direct to state reporting (DSR) requirement. Filers must report to each applicable state, with the states providing the information requirements and reporting deadlines. How can your business keep pace with the details for each state in which it operates?
This ebook compiles the basics of state reporting requirements for 1099-NEC and 1099-MISC, including the following:
The digitization of tax compliance and reporting is unavoidable. Additionally, businesses face increased filing complexity and lowered thresholds for e-filing. Small- to medium-sized organizations are especially seeing great challenges in meeting all 1099 form requirements. It’s important to understand that homegrown solutions or manual efforts cannot continue to keep pace with the changes.
The issuing and filing of 1099-NEC and 1099-MISC forms is an essential part of tax reporting. When you have a better understanding of the types of required reporting, why it is required and how those details impact your company, you can better achieve and maintain state reporting compliance.
DemandScience, on behalf of Sovos, conducted a survey to see what challenges retailers face related to sales and use tax compliance. By interviewing full-time finance and accounting decision makers at retail companies with annual revenues of $25 million to over $1 billion, Sovos garnered a better understanding of current sales tax obstacles and how organizations can address them.
Omnichannel retailers need the right tools and processes in place to properly meet the ever-evolving sales and use tax filing and reporting requirements. Economic nexus was just the beginning, and it is hardly going to be the last challenge for businesses to overcome.
Limited IT resources, budget constraints and lack of leadership buy-in can all impact retail organizations’ approach to sales and use tax compliance management. But those obstacles do not have to be insurmountable. Opting for a comprehensive and centralized platform with access to the latest forms, the ability to streamline audit activities and ongoing support for any technical issues is key for sales tax compliance.
SAF-T (Standard Audit File for Tax) is an international standard for the electronic reporting of accounting data from organisations to a national tax authority or external auditors used by tax administrations to gather granular data from businesses either on demand or periodically.
The SAF-T standard has been adopted in mostly European countries, alleviating the need for tax authorities to physically visit companies to extract and review wide-ranging corporate data.
This e-book includes:
Countries that have introduced legislation to enforce SAF-T requirements include Austria, France, Lithuania, Luxembourg, Norway, Poland, Portugal and Romania. SAF-T requirements are continuing to be adopted in a number of EU Member States and countries in other regions are actively considering introducing it.
The latest SAF-T standard includes accounting, accounts receivable, accounts payable, fixed assets and inventory datasets. In most cases authorities request a text file on an XML structure.
The SAF-T guideline is flexible, enabling governments to freely adapt SAF-T to suit their tax filing and audit systems, to perform audits, or as a basis for prefiling periodic tax declarations such as VAT returns or inventory statements.
This e-book discusses the introduction of SAF-T back in 2005 and how the standard has evolved since then, as well as the challenges of SAF-T for both businesses and governments.
Sovos helps customers manage their SAF-T requirements across multiple jurisdictions through software solutions that automate the processes to seamlessly extract required data, map data accurately to SAF-T structures in the latest legal formats and perform deep analysis on the SAF-T output generated.
Sovos provides certainty with a future-proof strategy for tackling compliance obligations across all markets as VAT regulations evolve toward continuous e-reporting and other continuous transaction controls requiring increasingly granular data. Sovos’ solution for SAF-T combines extraction, analysis and generation providing our customers with the certainty they need.
Experience end-to-end handling with compliance peace of mind with Sovos.
Did you know that approximately 1 in 10 people have unclaimed property (UP) in their name? Research conducted by Sovos found that there is upwards of $77 billion in UP assets currently in the United States. As states are cracking down to close the estimated $600 billion tax gap, UP is a prime target for states to recoup revenue through compliance enforcement. This report takes a deep dive into the intricacies of UP and how businesses can alleviate the stress of the UP compliance process:
It’s the law to track and report unclaimed property and you cannot count unclaimed funds as income. UP is governed and enforced at the state level with no two states having the exact same laws regarding UP. These laws are regularly changed and updated, requiring companies to stay on top of these legislative changes. Failure to follow unclaimed property laws can land business owners in hot water with costly fines and even jail time. With such high stakes at play, you would think organizations would stay on top of UP laws, however, that couldn’t be further from the truth. It has been estimated by states and audit firms that less than 20% of organizations are in full compliance with UP laws. Companies across numerous industries often don’t know they have an UP responsibility until they find themselves under audit or receiving a compliance invitation letter from a state(s).
Unclaimed property is a compliance concern often put on the backburner, but it is now being brought to light with governments eager to close the growing tax gap by embracing new technology and enforcement methods to guarantee they collect what is legally required. Ensuring your organization is in full compliance with UP regulations should be of utmost importance. Letting UP fall to the wayside may ultimately result in serious penalties and audits for your business. This can be avoided by working with the right partner to create a strategy that will streamline the UP compliance process.
France is now moving towards continuous transaction controls (CTCs), introducing mandatory e-invoicing coupled with e-reporting.
The trend towards CTCs is global, and France is one of many countries to join this journey. As with previous CTC reforms in other countries, fiscal and economic gains are expected for both the government and businesses, such as:
Along with this, France is implementing an e-invoicing and e-reporting mandate. This is alongside the B2G e-invoicing obligation that is already mandatory.
The new French framework foresees a public platform as the recipient of data from e-invoices and e-reports. On top of this, a central directory will keep track of the invoice lifecycle, including payment status.
From July 2024 to January 2026, France will implement mandatory e-invoicing via a central platform and connected service providers as well as a complementary e-reporting obligation.
With these comprehensive requirements, alongside the B2G e-invoicing obligation that is already mandatory, the government aims to increase efficiency, cut costs, and fight fraud.
This extended timeline is welcomed by many companies, providing more time to better understand and prepare for the far-reaching consequences of this reform for their business processes, IT systems and tax compliance strategy.
However, businesses should start preparing now. Here are the key dates:
From 1 July 2024
All companies headquartered or with established operations in France will have to accept e-invoices through the CTC system from their suppliers.
Issuing e-invoices according to the CTC regime will become mandatory for the largest enterprises (some 300 entities).
The e-invoicing mandate does not apply to B2C and cross-border invoices though there is an obligation to report those transactions.
From 1 January 2025
The same e-invoice issuance and e-reporting obligation will apply to a further 8,000 mid-sized companies – “Entreprises de taille intermédiaire”
From 1 January 2026
All remaining medium and small companies will be in scope of the mandate.
The mandate presents challenges for businesses. There is a lot to consider, and most businesses current IT and manual processes aren’t equipped to handle this change.
The French e-invoicing mandate is still evolving and there are many elements remaining before the scheme is introduced.
In this e-book, we will cover in depth how business can achieve compliance:
Many businesses will need help to achieve compliance with the new mandate.
Sovos has unmatched experience with continuous transaction controls and e-invoicing mandates all over the world. Our scalable global platform has evolved to encompass new mandates, handling the needs of today, and the future.
Governments are in your company’s data, demanding real-time reporting. This is the new reality – the new role — for your IT team.
What are you going to do about it?
Will you build a global strategy to manage your obligations, or take on a costly set of one-off fixes?
Make the right choice with guidance from five industry experts.
Don’t go it alone. Talk to our experts.
John Dowd, Indirect Tax Manager at sport-fashion retailer JD Sports discusses how he managed cross-border VAT compliance with the help of Sovos’ managed services
“For us at JD Sports and me personally I’m looking for a partnership, something long term, as it takes time and costs money to change advisors. I’m looking for a long-term relationship over a number of years with a VAT service provider.
“I want my advisor to have specialist knowledge, for us that’s retail and cross-border supply chains, overseas tax authorities, and I want to see new talent joining the team. I prefer a single point of contact to make it easier to move things along and of course, competitive pricing, and Sovos ticked all of these boxes for us.”
John Dowd, Indirect Tax Manager at JD Sports
VAT compliance has many elements, beginning with an understanding of place of supply rules to determine where VAT registration is required. Fiscal representation might be required to register in EU Member States.
Once VAT registration is underway, the next step is to determine EU VAT obligations by mapping the supply chain for the country of registration. There are also additional requirements to consider including exemptions, recovering VAT, Intrastat and varying continuous transaction controls (CTCs) mandates.
Submitting VAT returns to ensure compliance is a never-ending process. Each country has its own VAT return regulations and additional declaration requirements.
The VAT compliance cycle also includes preparation for VAT audits. Tax authorities can carry out audits for a variety of reasons so it’s important businesses prepare for audits and ensure they are able to manage the process successfully.
Sovos’ end-to-end, technology-enabled VAT Managed Services can ease your compliance workload and mitigate risk where-ever you operate today, while ensuring you’re ready to handle the VAT requirements in the markets you intend to dominate tomorrow.
The EU E-Commerce VAT Package came into effect on 1 July 2021. And with it, the need for operational change, business disruption and plenty of accounting complexity.
A key component of the package is the Import One Stop Shop (IOSS) – a new way for companies to meet their EU VAT obligations when trading cross-border.
In this e-book we explain IOSS’s key concepts and common use cases so you can better understand and take advantage of IOSS and how you apply it to your business.
IOSS is expansive, complicated and rewrites the rules for companies selling into and within Europe. This e-book aims to simplify that for you. We cover:
We spend ample time on each of these topics so that you feel confident understanding whether IOSS is the right option for your business.
Our e-book starts with an easy-to-understand primer on IOSS. This includes how IOSS operates, its many rules and what has happened. The e-book also explains more on IOSS intermediaries as well as their purpose and when they can be used.
Find out more about the IOSS registration process, including its effects on:
We answer some important questions you should consider about IOSS registration:
Will you need to appoint an intermediary?
How will you appoint one?
How will you get set up for IOSS registration – will you do this yourself or search for help?
How will you submit monthly returns and pay the VAT or use a partner?
How can you ensure record keeping data is in the right format and up to date?
How will you respond to tax authority audits?
Whatever your eventual IOSS decision is, our e-book will help you make an informed decision for the good of your business.
Compliance peace of mind with a complete, global VAT Managed Service from Sovos
Whatever your VAT implications, Sovos has the expertise to help you navigate your global events and the complexities of cross-border VAT obligations.
Our VAT Managed Services ease your compliance workload while mitigating risk wherever you operate today. In addition, we ensure you’re ready to handle the VAT requirements in the markets you intend to lead tomorrow.
Welcome to the 13th edition of Sovos’ annual Trends report where we put a spotlight on current and near-term legal requirements across regions and VAT compliance domains.
This report provides a comprehensive look at the regulatory landscape as governments across the globe are enacting complex new policies to enforce VAT mandates. It examines the demanding and unprecedented insight now required into your economic data so that regulatory authorities enforce standards and close revenue gaps.
This year’s report examines the evolution of law and practice around the four emerging megatrends that Sovos experts identified in the 12th edition. These trends, many of which revolve around tax compliance and controls being ‘always on’, have the potential to drive change in the way organizations approach regulatory reporting and manage compliance.
Authored by a team of international tax compliance experts, we provide extensive recommendations on how companies can prepare for and thrive through these changes.
CTCs have emerged as the primary concern for multinational companies looking to ensure compliance despite growing diversity in VAT enforcement approaches. Tax authorities are steadfast in their commitment to closing the VAT gap and will use all tools at their disposal to collect revenue owed. This holds especially true in the aftermath of COVID-19, when governments are expected to face unprecedented budget shortfalls.
The potential costs and risks associated with the trends highlighted in the report cannot be effectively mitigated with a reactive or opportunistic approach. The digital transformation of tax administration can – if approached as just an evolution of the legacy ‘post audit’ VAT world – significantly contract the digital transformation of businesses. This report suggests an analysis framework that companies can use to ensure ongoing VAT compliance whilst maximizing the opportunities of modern information and communication technologies for their own benefit.
In addition, Trends includes a major review of the country and regional requirement profiles. These profiles provide a snapshot of current and near-term planned legal requirements across the different VAT compliance domains.
IT spending set to exceed $4 trillion in 2023
Your opportunity to implement new technology and make necessary upgrades is here. However, government-mandated e-invoicing laws are poised to potentially disrupt these plans.
Governments have made their way into your company’s data stack and are examining transactions in real-time.
Do you have the tools to respond?
Government mandated e-invoicing has elevated the risk of non-compliance to unprecedented levels and leadership is rightfully concerned.
New investments and technology have allowed tax authorities to take up residence in your data, enabling real-time oversight and enforcement.
The government’s new approach demands a technology response, and management is looking directly at IT to figure it out.
So, what’s your plan?
What are top sales tax compliance trends and strategies for increasing efficiency and reducing risk?
Sovos and the Manufacturers Alliance partnered to conduct a survey to gain a better understanding of trends in sales and use tax compliance. This survey asked manufacturing leaders what they are seeing and the strategies they are using to reduce risk and attain a more efficient filing process.
Below are five key survey findings on how industry leaders are best adapting to evolving requirements and changing business practices:
VAT compliance throughout a global supply chain is paramount. It has never been more important to get right.
165 countries worldwide levy a form of VAT. Each has its own set of rules for both compliance and reporting.
Some governments are also now placing increased emphasis on indirect tax and changes to their tax regulations, with technology-enabled enforcement efforts.
Download this e-book for an in-depth look at the vital elements needed for today’s VAT compliance. There’s guidance to help with your tax strategy so you can maximise the benefits from an efficient global supply chain.
Tax shouldn’t impede growth, and it doesn’t have to if you have a proactive tax compliance strategy. So to minimise risk, VAT needs to be a critical factor in supply chain planning.
In this e-book, we take a detailed look into crucial elements of VAT compliance, with clear explanations to inform your tax strategy and to also help you reap the full benefits of an efficient global supply chain. In detail, we look at:
Failure to comply creates both risk and consequences for businesses such as:
VAT is becoming more complex and governments are digitizing indirect taxes. Therefore, businesses need to be armed with the right technology to simplify and streamline global tax obligations.
In the ever-changing legislative environment, businesses must also be able to maintain both control and visibility of their global tax obligations effectively. They need to use insights to predict what will change next.
With standardisation, automation and new levels of data, Sovos combines unparalleled regulatory expertise with technology that supports compliance by enabling:
Contact us now and let Sovos help you reap the full benefits of an efficient global supply chain.Download the e-book
Keeping up to date with the latest rates, rules, and regulation of Insurance Premium Tax (IPT) is a challenge for insurers. Not to mention this is especially complex for insurers writing across multiple territories.
Written by Sovos’ team of regulatory specialists, IPT Compliance – A Guide for Insurers provides everything you need to know about the IPT regulatory landscape.
A mix of deep dive country-by-country information in addition to guidance on IPT and the digital tax landscape, this guide is for any insurer wanting to know more about IPT compliance.
Despite its focus on Europe, our guide also explores other jurisdictions in Asia, Australia, North and South America. This guide is your trusted source of information wherever in the world you write business.
The IPT Compliance Guide for Insurers includes:
The digital future of IPT
The tax landscape is changing. Governments across the globe are looking to technology that helps to fill tax revenue gaps and also speed up tax collection. As a result, tax authorities are increasing their focus on the insurance industry. They are ensuring IPT and parafiscal taxes are collected correctly, accurately, and on time.
In light of the rise of digital tax regimes and granular reporting, IPT compliance should be a priority for insurers. Incorrect filing or reporting can lead to costly penalties and reputational damage otherwise.
Our IPT Compliance Guide for Insurers e-book provides guidance on the many elements of IPT compliance. This includes tax point, tax rates, currency, filing, submission and the importance of accurate data.
Owing to the recent changes in IPT across Europe, including Spain’s complex and detailed reporting requirements and Portugal’s Stamp Duty reporting, this guide will help you navigate the ever-changing IPT landscape.
The IPT Compliance Guide for Insurers takes an in-depth look into some of the more complex and unique IPT jurisdictions across Europe. This includes Italy, Slovakia, Portugal, France, Germany, Spain, Finland, Denmark, and the UK.
Europe is the third largest insurance captive domicile in the world. Around 15% of companies are established within the continent. This e-book also contains relevant IPT rules, applicable charges, and guidance for captives.
The UK’s exit from the European Union was only the beginning for businesses and their planning. And as the immediate months after Brexit have shown, tax teams must continually adapt their processes, resources and technology to keep pace with changes.
Confidently navigating this landscape requires extensive knowledge of legal, fiscal and operational matters. Our Post-Brexit VAT Rules e-book will help you overcome these challenges.
Download the e-book for the latest guidance on how to comply with VAT rules in a post-Brexit world and how to protect your cross-border trade.
The UK became a third country with regard to the EU on 1 January 2021. This has had major consequences. It affected everything from cross-border trade and tax administration to law-making, government coordination and consumer rights.
The EU-UK Trade and Cooperation Agreement was agreed on 24 December 2020, a week before the end of the transition period, and is now fully implemented into UK law. Subsequently, on 27 April, this agreement was ratified in the European Parliament.
However, as the months continue to pass, businesses still feel the everyday effects of the agreement. Many organisations are still untangling what Brexit means to them from a VAT compliance perspective.
This e-book explores what points businesses should focus on post-Brexit.
Learn more about:
Businesses should continue reviewing their supply chains and, where necessary, put appropriate new measures in place to protect trade.
For example, UK businesses can no longer use their UK VAT number to apply simplification measures within their supply chains – such as acting as the intermediary party in triangulation and operating a call-off stock.
This e-book covers this topic in depth as well as:
There’s no denying that Brexit commands an inordinate amount of time, resources and money.
Sovos is here to solve the complexities you’re facing due to Brexit as well as the digital tax wave occurring in many countries around the world.
Whichever side of the channel you operate on, contact us to discuss how we can help you navigate the complexities of a post-Brexit landscape.
Government mandated e-invoicing has elevated the risk of non-compliance to unprecedented levels and leadership is rightfully concerned. New investments and technology have allowed tax authorities to take up residence in your data, enabling real-time oversight and enforcement.
The government’s new approach demands a technology response, and management is looking directly at IT to figure it out. So, what’s your plan?