e-book: IPT Compliance – A Guide for Insurers

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.

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The IPT Compliance Guide for Insurers includes:

  • The evolving digital tax landscape
  • Tax compliance intensifies – the cost of getting it wrong
  • Technology disconnect and why IPT needs prioritising
  • The changing landscape for European captives and the challenges ahead
  • Easing the stress of IPT filings
  • The complexities for insurers when writing insurance through third parties
  • Indirect tax rules for insurance across the world
  • European country deep dives
  • How Sovos can help

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.


Post Brexit VAT Rules

Post-Brexit VAT Rules – Protecting EU Cross-Border Trade

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.

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What’s changed post-Brexit?

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:

  • An independent United Kingdom and how this affects trade
  • Changes to VAT, including export exemptions and import accounting
  • The effect on supply chains and fiscal representation
  • How Post-Brexit Impact Reviews can help businesses
  • Next steps

Supply chains in a post-Brexit world

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:

  • B2B Supply Chains
    Learn about Incoterms, VAT registration within Member States and how businesses approach VAT recovery within a post-Brexit world.
  • B2C Considerations
    The removal of Low Value Consignment Relief in addition to the introduction of the Import One Stop Shop (IOSS) alter how UK businesses sell to European customers. Because of this, it’s important that B2C businesses understand what’s required to stay compliant.
  • Fiscal Representation
    Many EU tax authorities require non-EU businesses to appoint a fiscal representative when registering for VAT. Discover how this affects your business and the people leading your VAT compliance. 

Sovos can help your business post-Brexit

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.

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Connecting the Dots of Unclaimed Property

Most companies probably don’t understand the risks associated with unclaimed property, but they can be significant. In this eBook, learn:

  • What unclaimed property is and why it presents risks
  • How to manage state-by-state unclaimed property regulations
  • How to deal with unclaimed property compliance efficiently and effectively 

EU E-Commerce VAT Package: New Rules for 2021

Easing cross-border transactions

From 1 July 2021, the existing Mini One Stop Shop (MOSS) scheme transitions to a new framework. This is the 2021 EU e-commerce VAT package.  This e-book guides you through the EU’s OSS, IOSS and the new VAT rules for e-commerce.

The growth of e-commerce and cross-border trade is having a radical effect on VAT. Companies large and small are caught up by sweeping changes. With more change on the horizon, now is the time to prepare.

The introduction of the new EU VAT e-commerce package, in addition to the UK’s recent changes to the rules regarding overseas goods sold to customers in the UK, means businesses across the world should implement new systems. Now is the time to familiarise themselves with how the new frameworks affect their operations, commercial position and liabilities in both the EU and the UK.

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The goal of the EU VAT e-commerce package is to simplify cross-border B2C trade in the EU, ease the burden on businesses, reduce the administrative costs of VAT compliance and ensure that VAT is correctly charged on such sales. EU businesses will be able to compete on an equal footing with non-EU businesses that charge VAT.

Moving forward there will be:

  • Import One Stop Shop (IOSS) for goods delivered from outside the EU
  • One Stop Shop (OSS) for intra EU B2B deliveries of goods and for services provided B2C by EU established suppliers
  • Non-Union One Stop Shop (non-Union OSS) which replaces and extends the current MOSS 

This e-book answers questions about the upcoming EU e-commerce package helping businesses ensure they prepare for the change and make informed decisions.

  • How will the One Stop Shop work?
  • What are the benefits of the One Stop Shop?
  • When will the One Stop Shop changes come into effect?
  • How do I register for the One Stop Shop?
  • What do I need to do to prepare for the One Stop Shop?
  • Is the One Stop Shop right for my business?
  • I am a business established in the EU, what do I need to consider?
  • I am a business established outside the EU, what do I need to consider?

As well as providing practical advice for EU and non-EU established businesses, the e-book also includes OSS and IOSS examples. We provide an in-depth view of the potential iterations that apply to direct to consumer businesses and those that sell via online marketplaces.

Download the e-book to understand the implications of the 2021 EU e-commerce VAT package and ensure your business is ready by 1 July 2021 for the significant changes ahead.

Navigating Turkey’s Evolving VAT Landscape

As an early adopter of the ‘clearance model’, Turkey positions itself as one of the leading countries in the world when it comes to tax digitisation. For more than a decade the Turkish Revenue Authority (TRA) has successfully collected real-time financial data from businesses ensuring the effectiveness of its VAT enforcement system.  

With data is becoming more precious than oil and technology, it has transformed global market dynamics across all sectors, and has changed the way businesses operate today.   

Data is also transforming the way governments reduce their VAT gap. 

Starting almost two decades ago, the first clearance models were introduced by the tax authorities in Latin America with real-time or near real-time reporting. Governments around the world have since become much bolder in introducing structural changes to the way they regulate and enforce VAT, and often at short notice. Turkey is no exception. 

The TRA continue to evolve the scope of its VAT control framework. Navigating this ever-changing and evolving transformation is a challenge for all companies trading in Turkey.   

Download this e-book if you are:  

  • A Turkish company with operations exceeding the mandated limits from TRA 
  • An International company with operations in Turkey  

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A Global Framework: Continuous Transaction Controls (CTC) 

The first steps towards the ‘clearance model’ began in Latin America in the early 2000’s, and most of these now have stable CTC systems where a significant amount of the data required for enforcement is based on invoices. A decade later other economies, like Turkey, followed suit. A considerable number of EU member states are now moving toward CTCs, not by imposing ‘clearance’ e-invoicing, but by making their VAT processes more granular and frequent via CTC reporting.  

Turkey’s digital tax journey  

The e-invoicing framework was introduced in Turkey as early as 2012. Since then the scope of the e-invoicing mandate has grown with new requirements introduced to accelerate the digital tax transformation.  

The latest General Communique on the Tax Procedure Law (Communique) published on 19 October 2019 includes even more taxpayers who need to comply with the mandatory e-invoicing framework.   

What lies ahead for Turkey’s e-invoicing framework?  

When it comes to VAT enforcement, the TRA’s effectiveness now extends to include the scope of its VAT control framework by reducing thresholds and introducing new e-documents. The latest General Communique published by the TRA in October 2019, means even more taxpayers than ever need to comply. This trend is set to continue further.

VAT Guide for Finance Directors - Why it’s now a Boardroom Concern

The real value of VAT within tax compliance shouldn’t be underestimated.  It’s one of the fastest growing and rapidly changing indirect taxes for finance teams globally.  And, as it’s a transactional tax, errors can’t be easily corrected so the consequences of errors can be far reaching from impacting supply chains, to increased audits, fines, lost revenue and reputational damage.

In recent years, the spotlight on VAT noncompliance has grown ever brighter. Tax administrations worldwide are turning their attention to the VAT gap. In Europe alone the VAT gap sits at €140 billion.

VAT is gaining in importance. Compliance is consequently becoming more complex and intrusive into core financial and physical supply chains.  For these reasons, it’s a tax which must be given a much higher position on any finance director’s agenda than before.

This guide addresses:

  • The role of systems and business processes for VAT
  • The crucial interaction between finance, tax teams and IT departments
  • Risks and challenges of the international landscape – risks and mitigation
  • The possibilities for automation or outsourcing support to meet VAT compliance obligations

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VAT – the world’s fastest growing tax

Invented in Europe, VAT is, according to the OECD, the world’s fastest growing tax by some distance. The mobility of capital in the modern world is phenomenal – profits and incomes are inherently and immediately transportable. But indirect consumption taxes, tethered to a transaction and a location, are an extremely attractive proposition to tax authorities, offering as they do a certain order and control.

In recent years, the spotlight on VAT noncompliance has grown ever brighter. Tax administrations worldwide are turning their attention to the VAT gap, which in Europe alone sits at €140 billion. These vast sums make the VAT gap a fast moving source of lost revenue that tax authorities are determined to slow. As a result, major shifts in VAT collection and enforcement are taking place, among them continuous transaction controls (CTCs), destination taxability, aggregator liability, e-accounting and e-assessment. These factors are contributing to a multifaceted overhaul of VAT ensuring tax authorities have increased and unparalleled levels of access to granular data leaving businesses little room for error and raising the stakes for compliance.

insurance premium tax spain

Spain IPT: How to stay compliant in a complex tax jurisdiction

Spain is one of the most complex countries within Europe for insurance premium tax compliance.

This is due to the different tax authorities involved in the process. Spain has a national tax authority and four provincial tax authorities – within those, four of the 50 provinces have an independent tax authority. These are all within the Basque country and Navarra regions and are Álava, Guipúzcoa, Vizcaya, and Navarra.

The complexities and challenging means of reporting liabilities only adds to the difficulties for insurers writing policies in the country.

Download our new e-book to learn more about the challenges faced and how Sovos can help insurers comply with Spain’s complex reporting system.

The e-book covers three main topics:

  1. Insurance Premium Tax
    Filing requirements at a provincial level
  2. The Consorcio de Compensación de Seguros (CCS)
    Recently introduced reporting system and its requirements
  3. The Fire Brigade Charge (FBC)
    Overview of the complex and lengthy reporting process

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Here is a summary of some of the main challenges faced by insurers writing in Spain:

Spain’s IPT rate

Unlike other countries in Europe, there is only one rate that applies to taxable insurance premiums in Spain. The rate is applied to premium received by an insurer but there are several exemptions that insurers need to be aware of.

Common data challenges

IPT data issues are fairly limited in Spain, but there are often difficulties with requirements from the CCS, the national tax scheme for compulsory catastrophic risk insurance.

IPT submissions

Keeping up with the different submission processes for the five different tax authorities in Spain can be daunting as well as meeting different deadlines and complying with the varying legislations. In the future it’s expected that IPT submissions will follow VAT and become more automated.  Key to overcoming these challenges is to have comprehensive software that can help with the submission process due to the level of data needed to be processed and the amount of information the different tax authorities require in the annual tax return.

Late payments and penalties

IPT penalties levied by the tax authorities will depend on whether the late or historical declaration is voluntary or not in nature and take account of the amount of time between the IPT deadline and the settlement of the liabilities.

Consorcio surcharges

One of Consorcio’s main functions it to compensate policyholders in the event of an extraordinary risk event declared by the government. These broadly fall into three categories from natural disasters to violent acts, and acts by armed forces or law enforcement agencies during times of peace.  To carry out that activity, Consorcio requires insurers to contribute by charging extraordinary risks surcharges on their insureds and then for it to be declared within several Modelo returns.

As the Consorcio was the first tax filing system in Europe to declare policy by policy, the system is better suited to domestic insurers and to those whose principal business is based in Spain.

Transforming Your Approach to Tax in Brazil

Brazil has long been known for its diverse and rapidly changing regulatory environments. New tax laws are continuously being introduced and current laws are often amended without notice. For businesses trying to navigate this landscape it can be challenging, frustrating and even costly. Perhaps what is needed is a new approach to tax. This Ebook guides you through the process of transforming your approach to tax in Brazil.

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Sovos recently hosted a webinar featuring João Cavalcanti, Director SAP Partner Solution Center from SAP; Uira Gomes, Global Tax Director from AB InBev and Paulo Castro, Brazil country manager, Sovos. The focus was on how to navigate the most stringent regulatory landscape in the world while undertaking the technology and compliance journey needed to meet the demands of modern tax environments. This Ebook was generated from this discussion.

Why is getting tax right in Brazil so important? Because Brazil is the world’s ninth largest economy and is a major player in financial markets and global trade. Businesses across industries have embraced Brazil as an important partner in their growth and expansion plans, the economic might that Brazil brings to the table is critical for establishing a foothold in the South and Latin American markets.

To deal with this dilemma, organizations are looking to new approaches and solutions to help them manage their compliance obligations. Business as usual when it comes to tax in Brazil is a losing proposition and no longer acceptable. Organizations are now reevaluating how they implement new technology, when to involve tax as part of the discussion and the relationship they have with their technology partners.

While value-added tax is constantly evolving, Brazil’s complex and rapidly evolving tax codes and regulations are on another level and making it increasingly difficult for businesses to remain compliant. Many companies are turning towards VAT tax software and automation technology to reduce the burden of managing these processes.

Sovos has considerable experience in providing VAT tax solutions for companies operating in Brazil. Our team of local, regulatory experts is second to none and our cloud-based tax solutions work seamlessly with existing technology platforms such as SAP.

If keeping current with changing laws in Brazil is creating an undue burden on your organization and remaining compliant with VAT tax mandates has become more a matter of hope rather than a probability, we invite you to talk to our team of experts, we can help manage this process for you and allow you to focus on your core business.

Top Tax Considerations for SAP Customers

As a product or a service that is subject to VAT moves along the supply chain, transactions are documented, allowing the government to verify whether VAT was introduced at each step correctly through an audit.

While VAT is great in theory, it can leave massive holes in practice. Even though documentation might be out there, verifying the reliability of that documentation at every step in the supply chain based on aggregate periodic reports, paper-based records, and auditing companies’ diverse accounting systems is an almost impossible job for millions of supply chains around the world.

Read the article.

Christiaan Van Der Valk
Vice President, Strategy

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The result? VAT gaps. The EU reported to be approximately 140 billion euros short last year alone. To bridge this gap and increase visibility and control, tax administrations are undergoing aggressive digital transformations.

As a result, four notable trends in VAT and technology have emerged that will have a significant impact on businesses. 

  1. Continuous Transaction Controls – increased controls are turning up the pressure for standardizing technology ecosystems.
  2. Destination Taxability – the taxability of digital services,digital goods and small packages
  3. Aggregator Liability – alleviating the operational burden on tax authorities
  4. Standard Audits – tax administrations want access to your accounting data

These four trends are tax considerations that all businesses, especially SAP customers, should be aware of and have a plan to address. 

In this article, we will cover these trends and provide expert tips on how your organization can be ready for any changes coming your way

Determination & Remittance: The Two Sides of Tax

Achieving sales tax compliance is a complicated process that is growing more complex by the day. Every new regulation, law and rule must be accounted for or you run the risk of being audited. There are several steps in the process that must be accounted for and managed correctly.

First, sales tax determination is something that every business should fully understand. If you don’t know how to determine sales tax, you are already at a disadvantage in trying to meet and maintain sales tax compliance. You are likely to either over or under charge a customer which can lead to problems with regulatory authorities either way. So, take the time to understand this process and get it right from the beginning.

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Once you understand how to determine sales tax correctly, then comes the process of collecting and remitting sales tax to the appropriate regulatory authorities.

Armed with the knowledge of how to properly calculate and determine the proper amount of sales tax to charge, you can effectively process these transactions with confidence that you are doing so while in full compliance with regulatory standards.

However, collecting sales tax is only one half of the equation. To be fully compliant, you also must remit sales tax on time and use the proper forms and method. The remittance process can vary greatly state by state so it’s essential that you understand the regulatory requirements of each state you are operating in.

Some states will require paper-based submissions while others are completely electronic. Some will have multiple forms depending on the products or services you sell; others will have one standard form for all transactions. Understanding your requirements upfront will eliminate many headaches down the road.

To help you navigate this maze, we have partnered with our colleagues at LedgerGurus to provide this guide on how to successfully collect and remit sales tax. Or as we refer to it, manage both sides of your tax obligations.

We believe you will find the insights and links contained in this guide helpful as you look to better understand the process of determining sales tax obligations and managing the process through to successful remittance.

This guide is intended to inform and educate you as to the many different processes and methodologies that currently exist across the different states. When it comes to tax determination and remittance, there is no one size fits all approach, but there are some helpful resources available to you.

Understanding the Principles of Value Added Tax

If you operate a business in North America and are looking to expand into international markets you are going to need to become familiar with the concepts and implications of Value Added Tax (VAT).

VAT is the most common form of consumption tax used today, out of the 193 countries around the globe, 166 are currently operating with a VAT as a key part of their tax mix.

Overcoming the various challenges VAT offers doesn’t happen overnight, and as governments all over the world are increasingly focusing on their revenue base, compliance at first instance is vital in the face of more aggressive audits.

This guide will provide you with the necessary base understanding of VAT. It offers some valuable insights and guidance to getting started when you enter a new market that employs a VAT system of taxation and offers expert opinions on when to seek help.

Tax Identity Management 101

The Comprehensive Guide to Understanding and Complying with IRS TIN Matching Requirements

Overcome Hidden Nuances of the IRS TIN Matching Requirements

Enforcing tax identity information reporting is a priority for governments to increase revenue and reduce the current $9B tax gap. Businesses must report employees’ tax identification numbers (TINs) and names to government agencies to ensure that individuals and businesses are being reported in their database correctly and reconcile what’s being reported on 1099 and annual income tax returns.  

If reported incorrectly, the IRS can take action by issuing Notice CP2100 (“B” Notice), assessing Notice 972CG (“P” Notice) and enforcing backup withholding by issuing penalties to a business.

Knowing what the IRS requires in 2020 will minimize the liability of incorrect reporting to the IRS. This can help your business save significant time and money. 

To better understand what is being required of you, download the free Tax Identity Management 101 white paper to learn:

  • What tax identity management is and why governments care about it
  • How to minimize your risk of improper reporting
  • What backup withholdings are and how they are enforced
  • How to proactively and compliantly manage your tax identity information

Continuous Transaction Controls: Five AP Categories to consider

Multinational companies around the world are faced with the reality that tax authorities in the countries where they operate are introducing, or making major changes to digital tax mandates at an ever increasing pace.

Continuous transaction controls, often referred to as CTCs, where the tax administration pre-approves invoices in real-time via an automated data exchange with business source systems, are the leading and growing trend.

This eBook will help you to understand how your business can prepare for the growing wave of CTCs and learn why sales and purchase transactions will face increasing, and continuous, tax scrutiny.

Download your complimentary copy of Get Ready for Continuous Tax Controls to learn:

  • Traditional reasons for AP invoice scrutiny
  • New CTC obligations and risks for buyers
  • Five AP areas at risk
  • A modern approach to AP must integrate tax

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Software Procurement Guidelines for Tax Managers

The role of tax managers in software procurement is rapidly evolving. Businesses today are involving VAT and other tax professionals early in the buying process to provide expertise and ensure that every business process that needs to be integrated with real-time tax platforms is doing so in a timely and cost-effective way.

VAT compliance can only work smoothly if specific processes are made a standard function of day-to-day business operations. When leaders in finance, supply chain management, IT, client operations and others acknowledge the importance and interdependencies of each other, software procurement becomes a shared goal.

Download your complimentary copy of Software Procurement Guidelines for Tax Managers to learn more about:

  • The changing responsibilities for VAT
  • How to ensure your business is ready for continuous transaction controls
  • Guidelines for procuring transactional business applications
  • The role of tax managers in digital transformation

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Location of Risk Rules: Insurance Premium Tax

The global economy provides countless opportunities for businesses to grow however behind cross-border trade lies a complex web of systems, processes and mandates needed for effective governance.

These concepts are only too familiar to insurers who understand that the location of the underlying risk must be correctly established to determine and apply the correct tax treatment.  Writing complex multi-country policies adds to the challenge and can cause complications leading to penalties and double taxation to reputational damage.

Download this e-book to learn more about Location of Risk rules and why a robust calculation and apportionment procedure is key to compliance.

  • Political background – what prompted the rules
  • The local implementation of Location of Risk rules – common examples
  • Premium allocation – how things work in practice

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