VAT Digitization in Eastern Europe


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:
  • Understand how to comply with the e-invoicing and reporting in Eastern Europe
  • Deep dives into Hungary, Poland, Romania, Serbia and Slovakia
  • Must-read for tax professionals and consultants

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:

  • Understand how to comply with the e-invoicing and reporting in Eastern Europe
  • Deep dives into Hungary, Poland, Romania, Serbia and Slovakia
  • Must-read for tax professionals and consultants

Get the ebook

Who should read this ebook?

Tax professional

  • Need to be up to date with Eastern European regulations
  • Understand system requirements for real-time reporting and e-invoicing
  • Prepare and future-proof for upcoming tax digitization

Consultancy

  • Ensure best practices for clients
  • Keep up to date with latest regulations and developments
  • Confidently navigate the tax landscape to help clients with planning

Written by tax experts and regulatory specialists

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.

The challenge of VAT digitization in Eastern Europe

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.

Take a look at what's inside:

Regional tax knowledge

Detailed country guide

How to expand with confidence

What this guide to Eastern Europe e-invoicing and reporting compliance covers

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:

  • Continuous transactions controls –what are they?
  • Common clearance system features
  • Clearance regimes
  • Stay compliant with evolving CTC regulations
  • A close look at e-invoicing in the region
  • Romania
  • Poland
  • Hungary
  • Serbia
  • Slovakia
  • Compliance in Eastern Europe
  • How Sovos can help

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.

Romania –A sneak peak

There are three requirements for taxpayers in Romania:

  1. Mandatory e-invoicing for B2G transactions
  2. Mandatory e-invoicing for high-risk products
  3. Electronic transport mandate

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.

Sovos provides a cost-effective, secure, global solution capable of withstanding disruption prompted by the worldwide CTC trend.

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

Sovos’ VAT Compliance Solution Suite includes both CTC reporting and CTC e-invoicing as integral components of a fully scalable solution suite and includes Sovos Periodic Reporting, SAF-T and Sovos eArchive.

ebook

The Sales Tax and Digital Asset Dilemma: Advice for Legislators & Regulators

How digital assets and blockchain will impact sales tax

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. 

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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: 

  • Definitions of key terms and how they relate to sales tax
    · What is considered a digital asset? 
    · What exactly is blockchain? 
    · Why is this important? 
  • How online marketplaces come into play
    · Ecommerce markets v. non-fungible token (NFT) marketplaces 
    · The unique sourcing challenge for digital sales tax 
    · Will cryptocurrency have an impact? 
  • The questions surrounding sales tax collection – digitally
    · When does someone possess a digital asset? 
    · How will states evaluate digital assets that can be exchanged for tangible property or services? 
    · Is tax better deferred until an asset is redeemed? 
  • Words of advice for regulators and legislators
    · Know what you’re regulating before writing statutes 
    · Understand – and appreciate – that this is a new sales channel. Ecommerce, brick and mortar and now, digital assets will all likely be standing side by side. 
    · Short of official guidance, there is the chance for abuse of technology – how can you avoid it? 

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. 

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The Changing Nature of State Reporting for 1099-NEC/MISC

Understanding the basics and changing nature of state reporting for 1099-NEC and 1099-MISC will help you stay compliant

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? 

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This ebook compiles the basics of state reporting requirements for 1099-NEC and 1099-MISC, including the following:

  • A breakdown of the CF/SF program requirements versus the DSR requirements
    · Which states participate in each?
    · What are the potential downsides for each program?
    · If a state participates in one, does that mean they cannot participate in the other?
  • Discussion on recent changes to reporting requirements and what it may mean for certain states
    · How many states require 1099-NEC be filed to them directly?
    · Which states have issued guidance on the reporting requirements?
  • An explanation of common state filing issues
    · What are they and how can you avoid them?
    · Are all states facing the same issues?
  • Background on state backup withholding, including state-specific examples
    · What is the range of withholding rates?
    · Is it applied at the state or federal level?

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.

 

ebook

Streamlining Sales and Use Tax Compliance in Retail

What are the main sales use tax compliance challenges for retailers and how can they best overcome them?

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.

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The survey found the following takeaways:

  • Barriers continue to remain even when businesses know they must improve their sales and use tax strategies. Nearly every person surveyed (98%) said there are problems in changing their company approach. Limited IT resources (34%) and leadership not being made aware of a business need for compliance process improvements (60%) were some of the top issues cited. 
  • 35% of finance and accounting decision makers said keeping up with the speed and volume of tax rate and rule changes is one of the most significant sales tax compliance difficulties their department faces. With finance pros often wearing multiple hats at their company, working to maintain compliance can lead to burnout. 
  • Sales tax compliance takes up more time than initially anticipated. The survey found that updating transaction systems to reflect rate changes (36%) and researching tax rates for applicable jurisdictions and states (35%) consumes the most time for finance and accounting teams. Additionally, 47% of respondents said their organization spends between four and five business days each month on sales tax compliance.
  • 56% of respondents said their department’s sales tax software solution(s) are not yet in the cloud. However, larger companies with revenues of $1 billion or more were more likely to have already adopted cloud solutions.

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.

ebook

SAF-T: An Introduction to the International Standard

Understanding the flexible SAF-T international standards adopted by Austria, France, Lithuania, Luxembourg, Norway, Portugal and Romania

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:

  • What is SAF-T? – an exploration of the standard and its origins
  • A deeper dive of the SAF-T format – the current datasets and data requirements
  • The challenges of SAF-T for businesses – the flexibility and wider use of the standard
  • The future of SAF-T – what’s next?
  • How Sovos can help

Get the SAF-T international standards e-book

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.

How Sovos can help with SAF-T compliance

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.

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Annual Report

The State of Unclaimed Property

The Next Trend in Compliance: Unclaimed Property.

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: 

  • Who is impacted by unclaimed property?
  • Unclaimed property examples 
  • How does due diligence come into play?
  • What are voluntary disclosure agreements (VDAs) and why are they important?
  • Best practices for audit preparation

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Why should businesses care about unclaimed property?

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.

Preparing for France’s Mandatory Continuous Transaction Controls in 2024

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:

  • Fighting fraud and bridging the VAT gap (€10 – 15 billion per year in France)
  • Reducing invoice processing costs for companies
  • Monitoring the economic activity in the country
  • Increase efficiency
  • Automating part of the VAT reporting process

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.

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Rollout dates

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.

How can businesses prepare for 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:

  • An overview of the French mandate
  • The latest update to the timeline
  • Partner Dematerialization Platform (PDP) registration requirements
  • What’s on the horizon for the French Mandate
  • Challenges for your organisation – what buyers and suppliers need to consider to prepare their business processes
  • How Sovos can help businesses prepare for France’s e-invoicing mandate

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.

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ebook

Experts Outline New Roles for IT in Wake of Expanding Global Mandates

Do You Have the Right IT Strategy?

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.

Take action:
Don’t go it alone. Talk to our experts.

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Managed Services for VAT Compliance

Many multinational companies find VAT compliance challenging, especially when trading cross-border. With the increase in real-time reporting across Europe and differing VAT registration and reporting requirements, VAT compliance now requires significant resources and specialist knowledge to ensure compliance and avoid costly penalties. As your business expands, so do your VAT obligations. This is why many organisations, turn to managed service providers to ease the burden of VAT compliance, audits and fiscal representation. This e-book discusses the many elements of VAT compliance including:
  • VAT registration
  • Fiscal representation
  • How to determine VAT obligations
  • Filing VAT returns
  • Preparing for an audit
  • Managing VAT changes
  • VAT compliance advice from JD Sports’ Indirect Tax Manager
Download a copy of the VAT managed services e-book

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How JD Sports manage VAT compliance with Sovos’ Managed Services

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

The many elements of VAT compliance

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.

How Sovos VAT Managed Services can help with VAT compliance

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.

Download the VAT managed services e-book

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Simplify EU VAT with IOSS

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:

  • The basics
  • Intermediary requirements
  • Key considerations for your business
  • How to ensure IOSS compliance
  • How we can help

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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:

  • Customer experience
  • VAT registration
  • VAT simplification
  • Record keeping
  • Data collection and invoicing
  • Contingency planning
  • Commercial matters

We answer some important questions you should consider about IOSS registration:

  1. Will you need to appoint an intermediary?

  2. How will you appoint one?

  3. How will you get set up for IOSS registration – will you do this yourself or search for help?

  4. How will you submit monthly returns and pay the VAT or use a partner?

  5. How can you ensure record keeping data is in the right format and up to date?

  6. 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.

TRENDS AND UPDATES ON VAT COMPLIANCE

Trends 13th Edition 2022

TRENDS AND UPDATES ON VAT COMPLIANCE

Trends 13th Edition 2022

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.

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 The four mega-trends that we examine are:

  1. Continuous Transaction Controls (CTCs) – Countries with existing CTC regimes are seeing improvements in revenue collection and economic transparency. Now, other countries in Europe, Asia and Africa are moving away from post-audit regulation to adoption of these CTC-inspired approaches. The report highlights how countries like France and Hungary have accelerated their transition to CTCs, and how many jurisdictions are combining invoice controls with CTC transport documents, thereby expanding their real-time reach from financial to physical supply chains.
  2. A shift toward destination taxability for certain cross-border transactions – Cross-border services have historically often escaped VAT collection in the country of the consumer. Due to a large increase of cross-border trade in low-value goods and digital services over the past decade, administrations are taking significant measures to tax such supplies in the country of consumption or destination.
  3. Aggregator liability – With the increase of tax reporting or e-invoicing obligations across different taxpayer categories, tax administrations are increasingly looking for ways to concentrate tax reporting liability in platforms that naturally aggregate large numbers of transactions already. Ecommerce marketplaces and business transaction management cloud vendors will increasingly be on the hook for sending data from companies on their networks to the government, potentially even inheriting liability for paying their taxes. The report notes how the July 2021 introduction of sweeping changes in e-commerce VAT legislation via OSS and IOSS are confirming this trend.
  4. E-accounting and e-assessment – Combining CTCs with obligations to synchronize entire accounting ledgers makes onsite audit necessary only in cases showing major anomalies across these rich data sources. Over time, the objective is for VAT returns and other tax reports to be prefilled by the tax administration based on taxpayers’ own, strongly authenticated source system data. A brief deep-dive into the origins and potential future of SAF‑T shows how this trend is evolving to become a solid companion to CTCs globally.

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.

Ebook

Will Government Mandated E-Invoicing Rules Disrupt Your IT Organization’s 2023 Plans?​

IT spending set to exceed $4 trillion in 2023

-Gartner

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?

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Ebook

Why Government Mandated E-invoicing Rules are Burdening the Bosses

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?

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report

Key Sales and Use Tax Considerations for Manufacturers

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:

  • Improving efficiency in sales and use tax compliance and integrating sales tax technology are top priorities. These two areas were the top two selections by far among survey respondents when asked what their key sales and use tax priorities were for the next year.
  • Organizational changes add complexity to sales and use tax compliance. Overall, 44% of executives reported that changes in business strategy (e.g., M&A) added the most complexity to the sales and use tax compliance process. Technology (e.g., migrating to a different ERP system) change followed at 35%.
  • No matter the size of your company, sales and use tax compliance takes time and resources. While larger manufacturers spend significantly more time preparing for audits, smaller manufacturers prioritize the day-to-day compliance.
  • Investing in additional technologies and/or analytics is the top strategy that executives are selecting to improve their sales and use tax compliance. A majority (51%) of executives chose investing in additional sales and use tax technology as their most important strategy over the year.
  • Sales and use tax audits are increasing and most leaders think this trend will not stop. Over three-quarters (78%)of respondents expect more audits in the next 12 to 36 months. While 22% forecast the same level of audits, none of the respondents said they expect fewer audits in the future.

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How Tax Compliance Impacts Supply Chain Globalisation: The VAT Effect in Europe and Beyond

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.

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Your VAT compliance strategy   

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: 

  • What factors should you consider in VAT compliance planning? These include import VAT, local supply of goods, intra EU deliveries, chain transactions and triangulation, VAT reverse charge, in addition to zero-rated vs exempt goods.
  • What are the impacts of these types of tax and transactions? How these types of tax and transactions affect your business, when they apply, and what you need to do to avoid noncompliance. 
  • What are the new and changed regulations and what do they mean for businesses? Many governments have dramatically changed their tax regulations, introducing continuous transaction controls (CTCs) and the Standard Audit File for Tax (SAF-T) so tax authorities can better detect errors in tax reporting, and also look for discrepancies. 

 The cost of getting it wrong 

Failure to comply creates both risk and consequences for businesses such as: 

  • Disrupting operations. Noncompliance can disrupt operations, putting supplier relationships and supply chain stability on the line. Consequently, goods may be delayed at customs borders goods may be delayed at customs borders if formalities are not complied with. 
  • Delays in VAT refunds. Businesses could have their VAT refunds delayed, tying up significant sums of money that could instead be put toward paying suppliers or investing in innovations. 
  • Fines and penalties. Errors can result in penalties or fines of up to 200% of VAT owed. This directly impacts the bottom line and also transforms VAT from a neutral to a hard cost. 

The right technology for the job   

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:

  • Complete, continuous management of VAT determination and reporting, as well as business-to-government reporting in every country in which your business operates. 
  • Comprehensive functional and geographic coverage of VAT reporting, CTCs, compliance archiving, and determination around the globe. 
  • Integration with complex ERP, billing systems, POS, P2P and EDI systems as CTC and other VAT requirements create a much broader footprint on transactional and record-keeping systems. 

Contact us now and let Sovos help you reap the full benefits of an efficient global supply chain. 

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eBook: 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.

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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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Ebook

Why Government Mandated E-invoicing Rules are Burdening the Bosses

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?