If you’re a manufacturer operating in multiple regions, you know how overwhelming it can be to adhere to each state’s set of rules. Stay ahead in an increasingly regulated world by understanding how your peers are addressing the toughest sales tax challenges facing the manufacturing industry.
Review the basics to work toward a “passing grade” at end of reporting season
In a post-Wayfair world, every state with a sales tax has taken steps to update its approach to economic nexus. However, some states have gone to the head of the class when it comes to simplifying how businesses must report and remit tax. Which ones stand out for top grades and which ones still have some work to do?
As of tax year 2022, over 40 states require direct reporting of one or more series 1099 forms. Do you know the rules and regulations to maintain direct reporting compliance? Find out the five misconceptions around 1099 state reporting below.
Historically, financial institutions have relied on their core banking platforms to fulfill all their 1099 tax information reporting needs. Can core banking solutions keep up with the current demands of evolving regulations and customer expectations? Here are the telltale signs that it’s time to make a change to the way your organization processes 1099s.
Relying on manual sales tax processes is no longer good enough. Increasingly complex compliance requirements can push businesses of any size to the brink – especially as federal, state and local sales tax regulations evolve. With the right sales tax automation software, companies can experience short- and long-term benefits.
Insurance Premium Tax (IPT) can be complex with fragmented rules and requirements levied by the many different tax authorities in the jurisdictions where this tax applies. This only adds to the challenges faced by finance teams when calculating and settling IPT accurately and on time.
Failure to do so can result in penalties, fines and unwelcome audits – all of which will have an adverse effect on profitability.
Unlike other IPT compliance service providers, at Sovos we provide a complete end-to-end service for our customers providing complete peace of mind and allowing them to focus on what they do best while leaving the IPT compliance to us.
We not only produce and file IPT and parafiscal reports for our customers, but we also make the necessary payments and settle liabilities to the relevant tax authorities using cleared funds held in segregated client bank accounts.
We recognise that IPT is niche and not always a core function for finance teams which is why we offer a client money service for our IPT customers. The funds are held in a segregated bank account for our customers with reconciled statements being provided on a monthly basis.
A STREAMLINED PROCESS TO SETTLE IPT LIABILITIES
Based on data uploaded we let our customers know in advance the exact amount needed to settle each of their local IPT liabilities as they become due so there’s plenty of time to ensure the funds are available ahead of tax authority deadlines.
Once the funds have been received, we can then ensure the correct payments are made directly to the tax authorities in line with local legislation.
All receipts and payments with the segregated client bank accounts are reconciled with the submitted returns and monthly reports are provided.
COMPLIANCE PEACE OF MIND
A new technology change can be intimidating, but proper preparation can reduce frustration felt by your internal teams as well as reduce friction in your vendor communications. Here are key considerations for your tax engine project.
With the growing complexity of global tax compliance, businesses need a system that can handle specific rules and rates across thousands of jurisdictions. Now, you can connect your Microsoft Dynamics 365 Finance & Operations system to Sovos’ Global Tax Determination engine for real-time tax calculation, exempt sales management, return orders management and filing sales tax returns to the appropriate jurisdictions.
See the full infographic below.
Black Friday and Cyber Monday 2021 didn’t break any records for ecommerce sales, and they actually saw a slight dip in numbers compared to 2020. But even with labor shortages, supply chain issues and a global pandemic, October through December proved to be busy shopping months. With economic nexus in nearly every state, online retailers need to be especially vigilant with sales or use tax collection and remittance responsibilities.
Sovos understands that peak spending periods can happen at any time – not just during the holiday season. That’s why we’ve invested in our products and infrastructure to ensure seamless performance for whenever shopping surges take place. For Black Friday and Cyber Monday 2021, our uptime was 100% with an average response time around 100 milliseconds. Consumer shopping trends may fluctuate, but you need to ensure that your systems are able to accurately and promptly handle those adjustments.
How can manufacturers navigate the ever-evolving and increasingly complex world of sales and use tax? There are several key ways to evaluate your current and future approach to sales tax, maintaining compliance the entire way.
Faced with a VAT gap of nearly €13 billion, France is introducing mandatory e-invoicing for business-to-business (B2B) transactions from 2024, as well as e-reporting of additional data types. Applying to all companies established or, for e-reporting, VAT-registered in France, this new mandate is complex. It will also require significant planning.
According to the ICC, businesses will need at least 12-18 months to prepare for such continuous transaction control (CTC) mandates so it’s clearly important to start planning now to prepare for the change.
This infographic provides answers to your pressing points surrounding the mandate including:
The aim of the new mandate is to increase efficiency, cut costs and fight fraud via access to more transaction data. All B2B invoices will need to be transmitted through a central platform. This will be either directly or via registered service providers connected to the platform.
The new mandate will provide the French tax authority with access to all VAT relevant data related to B2C and B2B transactions, so it’s crucial to adjust your business systems and processes to avoid penalties and fines.
France is the latest country to adopt CTCs, as tax authorities across the world look to gain greater insight and close the VAT gap. The proposed requirements come into effect during the years 2024-2026.
July 2024: All companies, irrespective of size, must accept to receive e-invoices under the new rules. The largest 300 companies will be subject to the B2B e-invoice issuance mandate and wider e-reporting mandate. The e-invoicing mandate does not apply to B2C and cross-border invoices. However, there is an obligation to report those transactions so the tax administration has full visibility.
January 2025: Obligations will apply to a further 8,000 medium-sized companies.
January 2026: All remaining medium and small companies will be in scope of the mandate.
As France looks set to become the next country in Europe to introduce CTCs with its B2B e-invoicing and e-reporting mandate in 2024, it’s crucial that businesses prepare for and understand their new VAT obligations.
Sovos serves as a true one-stop-shop for managing all e-invoicing compliance obligations in France and across the globe. Sovos uniquely combines local excellence with a seamless, global customer experience.
Our scalable, end-to-end solution ensures e-invoicing and e-reporting compliance in not only France but also 60+ other countries.
Sovos is purpose built for modern tax – an evolving, complex landscape in which global tax authorities are requiring increased visibility and control into business processes, in many cases at the transaction level.
Tax authorities around the globe have embraced digitization to speed up revenue collection and reduce fraud while closing tax gaps. This is the catalyst for companies to move complete, connected and continuous tax compliance software into their digital financial core.
As your organization begins SAP S/4HANA migration, is tax compliance a priority? In our latest Spotlight Report, created in partnership with Americas’ SAP Users’ Group (ASUG), “Boost Tax Compliance Capabilities and Visibility with SAP S/4HANA” we make the case for including tax solutions at the very beginning of your planning process. Migrating to S/4HANA can become a big and complicated process for organizations, so it is important to plan accordingly.
In the world of tax, compliance is everything. SAP S/4HANA allows for organizations to view high-level reports and perform in-depth analysis on a line-item level. Increasing visibility is a big deal, and allows for you to identify hardware and software issues before they cause harm. Accounting for tax early in the upgrade process ensures that your organization is prepared for the challenges of modern tax compliance on an international scale. Companies operating on a multi-national scale have a great need for the enhanced visibility and reporting capabilities offered by S/4HANA.
Tax process automation is one of the most helpful attributes of S/4HANA, so ensuring that it is set up correctly the first time is critical. Failing to do so is costly and time consuming, so it’s best to get it done the correct way initially. Departments working without automatic processes may find themselves creating manual workarounds, which can lead to compliance risks and painful audits. Instead, focusing on an active relationship between tax and IT allows for the communication of potential impacts due to SAP S/4HANA migration before they happen.
Sovos understands that indirect tax compliance is difficult to navigate.This report highlights at which point in the SAP S/4HANA migration process SAP customers are including tax.
This Spotlight Report presents an overview of how businesses are planning to avoid integration and compliance issues by factoring tax early on in the SAP S/4HANA migration process.
By partnering IT and tax departments, your organization can enjoy complete visibility into complex tax processes. Complete visibility into tax processes and how they connect to SAP systems is a resource that allows companies to have their needs met in both the short and long term.
Download the report now and connect with one of our experts on how to prioritize tax in your integration.
Indirect tax compliance can be a behemoth and cause unnecessary strain on IT department resources. Is your company’s digital transformation keeping up with the governments in the locations you do business? Your tax solutions need to be continuous and automated to adapt the moment regulations change. For multinational organizations, this means around the clock monitoring. In our latest Spotlight Report, created in partnership with Americas’ SAP Users’ Group (ASUG), “The State of Indirect Tax Compliance Among SAP Customers” we explore how SAP customers are planning to modernize their indirect tax operations.
Indirect tax is an essential financial driver for any organization. It can also be a high-maintenance activity for IT departments. By tapping into the power of the cloud, you can ensure your business is charging, collecting and remitting the proper level of tax, all while dramatically reducing the burden placed on IT. Updating your indirect tax processes is a great way to streamline operations. In this report, we dive deeper into the indirect tax compliance landscape, and break down how SAP customers approach compliance, whether it be on premise or in the cloud.
Organizations are determining that manual processes won’t cut it when it comes to indirect tax. Poor system integrations, slow updates, and compliance issues are holding companies back from staying up to date with the modern ERP landscape. When you’re ready to make the change to the cloud, it’s important to choose a partner with the track record of producing minimal disruption to your business and operations.
Sovos understands that indirect tax compliance is difficult for SAP customers. Keeping up with hardware issues, manual updates and integration issues puts undue pressure on your organization. This report discusses how SAP customers are planning for the future to reduce indirect tax compliance headaches, which in turn helps you garner a better understanding of the current state of the industry.
This Spotlight Report provides an overview of how businesses are preparing for the continuing ERP evolution. By partnering with a third-party vendor, organizations can more easily overcome SAP-related challenges. And if something does go awry, a third-party vendor can be by your side, providing the support you need when you need it.
Are you ready to modernize your indirect tax operations? Download your complimentary copy of the report now and be sure to connect with our team with any questions you’re left with.
The journey of e-transformation and tax digitization for companies in Turkey began in 2012 with the e-ledger application being made compulsory for multiple sectors.
Over the years, the scope of e-transformation has expanded to include different e-documents. Compulsory e-document use was further expanded in terms of both application and taxpayers with the General Communique No. 509 published by the Turkish Revenue Administration (TRA) on October 19, 2019. And so 2020 became the year of e-transformation in Turkey. In 2021, with the effect of various regulations, the number of companies entering the e-transformation process has further increased.
In addition to the solutions provided to switch companies to compulsory e-document use, e-transformation applications provide many advantages for companies. Benefits include:
Sovos was built to solve the complexities of the digital transformation of tax with complete, connected offerings for tax determination, continuous transaction control compliance, tax reporting and more.
Sovos, the world’s leading global software provider protects businesses from the modern tax burden and risk, allows you to concentrate more on your core activities while providing complete future-proof solutions for modern tax compliance with its teams in Europe, North America, and Latin America.
Periodic VAT reporting takes time. Data must be accurate, its format must be correct, deadlines cannot be missed and additionally the frequency of submissions puts significant pressure on teams responsible for VAT reporting.
Add to these challenges frequent changes in regulation, cross-border complexities and also the fact that no single jurisdiction operates the same, and it’s clear that that your business would benefit from automating and centralising periodic VAT reporting.
This infographic explains how both global and multinational companies can meet their periodic VAT reporting obligations through the power of technology with Sovos Advanced Periodic Reporting (APR).
Manual tasks can be automated, processes are easily standardised, and you can also reduce your reliance on outsourcing providers. These advantages, coupled with the ability to lower management costs associated with keeping systems up-to-date, quickly add up.
Tax professionals need the right resources (both people and tools) at the right time. Sovos APR ensures you can continuously safeguard indirect tax compliance in a way that above all saves time and enhances accuracy. As a result, you can redeploy resources to focus on more strategic deliverables.
Sovos APR is an integral part of a fully scalable solution suite that addresses all VAT compliance obligations, including e-invoicing and e-archiving. Solve tax for good at a scale that suits your specific business.
Need more detail on Sovos APR? This infographic dives deep into the solution and also how it helps tax professionals solve their periodic VAT reporting challenges.
This includes:
Read the infographic now to learn how Sovos APR can:
Sovos APR lets you efficiently review everything from a centralised platform. Stay on top of any regulatory changes while remaining compliant both now and in the future.
What do all the Spanish words and phrases associated with Mexican e-invoicing mean, and what do companies doing business there need to know as they navigate around them? Here is a map to the Mexican e-invoicing universe.
Want to know more? Learn how Sovos has more than a decade of experience helping companies navigate Mexican e-invoicing mandates.