Italy: Electronic Invoicing and Reporting Requirements

Seeking to close a 35 billion euro tax gap, Italy has implemented a clearance e-invoicing model for domestic transactions. Get the details in the mandate and the requirements it involves with this guide.

Colombia: Electronic Invoicing and Reporting Requirements

Latin American compliance is a challenge for multinationals operating in the region. Inability to achieve or maintain compliance can cost companies hundreds of thousands or even millions of dollars each year. Colombia is a pioneer in electronic invoicing and VAT enforcement.

For more details on the evolution and requirements of the mandate, fill out the form to download the guide on e-invoicing in Colombia.

Key Considerations For IT and Tax to Ensure Alignment on the Journey to a Cloud-Based Sales Tax Solution

Why sales tax processes should be included on your journey to the cloud

The business needs of a multi-faceted organization are endless and priorities can quickly become skewed. It is important that businesses take steps to align strategies on ensuring tax is included in the cloud approach. 

 

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Tax Team
software integration and api
IT Team
Tax Team

How do we ensure alignment with IT?

  • What is IT’s cloud strategy?
  • What are IT’s near-term priorities?
  • Are there upcoming changes to transactional systems (ERP, eCommerce, P2P)?
IT Team

How do we ensure alignment with tax?

  • How are we currently supporting the tax function?
  • Does tax have any limitations in their existing processes?
  • Are they aware of our IT roadmap?
Tax Team

Assessing our current tax solution

  • How reliant upon IT are we?
  • Can we manage systems within tax?
  • What processes can we automate? 






IT Team

Assessing how tax fits into strategic planning

  • How much time are we spending on sales tax processes?
  • Where do we want to reduce the resource impact/manual work?
  • Do we have a strategy to move to S/4HANA? What are the implications of tax data migrations when we move to S/4, and the impacts of not properly accounting for this?
Tax Team

How do we prepare tax for the migration?

  • Identify and confirm ideal end state.
  • Review customizations and identify what needs to be changed.
  • Identify key stakeholders and migration concerns.
IT Team

When and where should we consider tax?

  • When changing to a transactional system.
  • When aligned with a cloud strategy.
  • As early as possible – don’t make tax an afterthought.

Migrating your tax engine to a cloud-based sales tax solution is the perfect time for IT and tax to align on strategic priorities.

Getting tax and IT aligned early and often eliminates issues and increased costs.

Sovos can help bring the two sides together with minimum interruption and maximum output. Talk to Sovos if you have questions about moving your tax engine to the cloud.

RESOURCE CENTER

New Form 1099-NEC & Direct to State Reporting

Tax and accounting professionals managing 1099 reporting will need help this tax season. Here’s why.

New 1099 Form

The new form 1099-NEC will replace box seven on Form 1099-MISC. This means the 1099-NEC will be the new form for reporting nonemployee compensation for services amounting to $600 or more. As a result, this form will have a significant impact on all types of businesses and their 1099-MISC reporting processes.

New Reporting Requirements for Federal & State

Further complicating things is the IRS announcement in Publication 1220 stating that information reporting data for the new Form 1099-NEC  will not be included in the Combined Federal/State Filing (CF/SF) program. More than 18 states have already released new state reporting requirements, format specifications and reporting deadlines for 1099 NEC. This means businesses will need to:

  • Track individual state guidance for the 1099-NEC that will continue to change late in the season
  • Understand state-specific requirements around data, reporting thresholds, format, timelines and adapting reporting processes for each state
INFOBRIEF

Taming the Value-Added Tax Beast with Technology

Value added tax (VAT) continues to increase in complexity as governments explore new methods for increasing revenues and closing tax gaps. In our newest IDC sponsored InfoBrief, “Taming the Value-Added Tax Beast with Technology” we explore the driving forces behind the VAT evolution and why it has led to increased complexity for organizations conducting business internationally.

The global VAT evolution is the result of many countries scrapping their local tax infrastructure and implementing a common global value-added tax (VAT) structure or significantly changing their VAT system. This shift adds a significant amount of change (for countries that switched to VAT) and uncertainty (for countries that are yet to switch) into corporate tax processes, especially for companies with interests in these new VAT countries.

Get the Infobrief

Why companies need to think globally when it comes to VAT.

VAT complexity is primarily a result of how widespread VAT is and the lack of uniform approaches among member countries. Situations that add to the complexity include:

  • VAT returns can differ greatly from country to country.
  • Different countries means translation issues abound.
  • Different industries can have different requirements.
  • The list of eligible transactions/ services is growing rapidly.

We have reached a point in the evolution of VAT compliance where localized point solutions can no longer keep pace with the demands of governments looking to close tax gaps and increase revenues.  Attempting to manage the complexity of modern VAT through disparate IT systems creates support and maintenance challenges that are essentially unsolvable.

With the tax gap continuing to increase globally, regulatory authorities have embraced the digitization of tax to increase revenue by eliminating suspicious supply chain activity and VAT fraud. This has provided a greater degree of control in implementing necessary reforms and changes.

Digitization has also lessened the burden on compliance by reducing paper trails through the automation of systems. Perhaps most importantly, it has allowed for the sharing of data between countries for cross-border transactions which has been plagued by inefficiencies and fraud.

This IDC InfoBrief provides in-depth analysis of why businesses need to consolidate and standardize platforms and IT processes to effectively implement compliance processes to create greater agility to capitalize on emerging markets. By having a single source of truth for data and reporting, organizations can better protect themselves against audits, fines and penalties.

Get your complimentary copy of the IDC InfoBrief now to ensure your organization is prepared to respond to the growing complexities of global VAT.

Are You Getting What Your Sales Tax Solution Promised?

GET YOUR FREE GUIDE

Is Your Sales and Use Tax Solution Falling Short of Expectations?

Many sales and use tax solutions leave you feeling underwhelmed once they become operational. What was billed as a complete solution to your organization’s increasing sales tax complexity has become instead a source of increased stress and anxiety.

You’ve become skeptical. We get it.

But manual approaches are no longer practical. You need to protect your business from painful tax audits and potential fines. 

Maybe you’re  thinking sales tax is just so complicated that the technology solution you’re using might be as good as it gets.

It’s not.

Maybe you think all vendors are the same.

They aren’t.

Or, maybe you think that the cost and pain of switching from one solutions provider to another would be more expensive and painful than it’s worth.

It isn’t.

Relieve your sales tax burden and refocus your efforts on other critical business functions. 

This free guide will help you review the state of your current sales and use tax solution and start you on a path to better tax compliance management with fewer surprises and better results.

Download your complimentary copy of our guide today, and then talk to Sovos. We can help.

Because when sales and use tax management is easier, life is better.  


Tax Compliance Has Entered the Spotlight

Sovos IDC Infobrief for Tech Gig and MLM organizations on 1099 Reporting & Withholding Management

IDC Infobrief

Tax Compliance Has Entered the Spotlight

Gig economies, multi-level marketing organizations, and multinational corporations are some of the fastest growing areas that are receiving increased focus on tax reporting, withholding, and compliance. This report created by IDC explains why tax agencies are focusing on these specific organizational models, how to comply with evolving tax regulations, and the top solution providers for your organization to partner with to ensure compliance.

As businesses rapidly continue to change, so do their go-to market strategies. This makes tax compliance more difficult for both companies and tax authorities. 

This infobrief covers the following areas:

  • Tax compliance market drivers
  • The growing tax gap
  • How regulators are playing catch up
  • The COVID-19 pandemic’s impact on tax compliance
  • External and internal adoption drivers
  • What to look for in a tax reporting and withholding solution

Why the increased focus on tech, gig, and direct seller organizations?

The growth of non-traditional workers continues to increase. This market is being driven by multiple factors including, the need to fill critical talent gaps, a lower cost of labor, the need for project help or acceleration, and the ability to access talent from anywhere in the world.

These non-traditional workers typically fall into one of three categories; gig workers, independent contractors, and statutory employees. There are currently about 1.6M gig workers, independent contractors have increased 30% from 2005 to 2015 and there are over 6M direct sellers, or statutory employees in the U.S. The number of non-traditional workers is on the rise, and shows no sign of slowing.

As the economy works to recover from the pandemic induced recession, regulators are focusing heavily on this segment to close the tax gap—which is now over $1B. The increase in non-traditional and contract workers has also contributed to the increased scrutiny on tax forms like 1099-K for third party online transactions and 1099-NEC for non-employee compensation.

The tax gap, backup withholding and compliance

Regulators are focusing on backup withholding to help close the tax gap, meaning organizations need to prioritize having compliant and proactive processes around non-traditional worker onboarding and validation.

To prepare for this, organizations need to internally assess their risk level, have proper training in place, and invest in proper infrastructure. Tax reporting and withholding software can help take out the risk of guessing and trying to keep up with changing regulations and deadlines.