IRS Tax Guidance for Virtual Asset Service Providers is Coming Soon. Is Your Organization Ready?

As the IRS prepares to release Form 1099 reporting requirements for virtual asset transactions, VASPs need to evaluate the various aspects of virtual currency cost basis calculations and the resulting tax withholding and information reporting considerations. 

This whitepaper will not only allow your organization to build a scalable compliance strategy and avoid costly penalties but also negate potential disruptions of service for your clients.

This whitepaper was created by experts at Silver Management and Sovos Compliance.

New Sovos Tax Information Reporting Solution Solves Escalating Tax Challenges for Accounts Payable Leaders

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Download your free report and get:

  • An overview of the current reporting environment for virtual asset service providers
  • Background on I.R.C. 6045, which may soon be expanded to include virtual asset transactions
  • Cost basis considerations as it relates to: trading, transfers, income and payment transactions
  • Regulatory & Tax Information Reporting considerations for virtual asset transactions
  • A path to building compliance and scalability for the long-term

As cryptocurrency goes mainstream, regulators have made digital assets a priority. As such, we believe a tidal wave of new guidance is coming. This whitepaper will not only allow your organization to build a scalable compliance strategy and avoid costly penalties, but also negate potential disruptions of service for your clients.

Annual Report

Sales and Use Tax in 2021:

What’s Changed?

Complexity Continues to Rule

As the rules governing economic nexus in the U.S. grow increasingly complex, it is important to define the sales and use tax changes being considered, the ramifications of new laws on remote sellers and marketplace facilitators and the varied approaches organizations take to effectively manage their tax obligations. For example, the end of 2020 had more than 14,000 bills being considered that could change sales tax compliance requirements. During that same time in 2019, there were only 7,000 bills.

The second annual Sovos Sales and Use Tax report delves into numerous issues impacting the industry, including the long-term implications on regulatory authorities from COVID-19 and how the existing tax gap is fueling new approaches to oversight and enforcement of current laws and standards. Tax and regulatory experts provide insights and technologists offer guidance and methods to help organizations understand how to reduce financial and reputational risk by remaining compliant.

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Last year showed that sales and use tax is changing and is changing at an increasingly fast pace. New policies capture tax more accurately and sooner. States continue to test the limits of organizations’ ability to track, process and remit sales tax. Furthermore, the COVID-19 pandemic added an additional layer of complexity and uncertainty, with more states adding economic nexus requirements. 

Why this matters to your business

The digitization of tax is at center stage in many growing businesses’ agendas. Organizations are quickly determining that automated technology solutions are increasingly critical to ensure a positive user experience. Are you confident that your sales tax solution will keep pace with every change or update? As your company evolves and changes, can your tax solution keep pace? Are you facing costly database or hardware upgrades and replacements? What’s the best way to ensure your solution seamlessly scales along with your business needs – all while maintaining compliance and controlling costs?

Sales and use tax manual processes are quickly becoming obsolete, creating a substantial burden on your team to meet new requirements to remain compliant. To that extent, what are the opportunity costs of managing sales tax on your own? What other critical business functions could your team be focusing on instead? And let’s not forget a worst case scenario: What happens when you change your processes, choose to manage sales tax on your own and get it wrong? Having a cloud-based sales tax software can reduce manual work while also offering better integration, faster updates, more automated processes and easier data management.  

Why talk to Sovos

Sovos understands that sales tax is complicated, which is why we compiled data, best practices and guidance from real experts to make the process more efficient and seamless. This report discusses the current state of the industry and what is likely coming further down the line, helping you garner a more complete understanding so you can maintain compliance without losing productivity. 

Ready to take the first step toward modern tax compliance? Download the report and reach out to our team with any further questions.

SAP® Central Finance and Digital Tax Compliance

Critical Prerequisites to Successful S/4HANA Digital Transformation

WHITE PAPER

Overcome the hidden barriers to your SAP Central Finance migration

For some SAP customers planning a move to Central Finance, tax compliance will not be a priority. Unfortunately, that will be a costly oversight. Today, those who fail to comply with global tax mandates face costly audits, financial penalties, decreased cash flow and damaged relationships with suppliers and customers. Non-compliance can even derail your Central Finance and SAP S/4HANA migrations altogether. And in some countries, it can bring your entire business to a screeching halt.

Get the free Compliance at the Core white paper and learn:

  • the tax compliance barriers you may have overlooked
  • how to prevent costly roadblocks
  • how tax compliance mandates will affect your Central Finance migration
  • precise steps your business can take to ensure your migration isn’t derailed due to non-compliance
  • what a successful migration to SAP Central Finance looks like

Trends in E-invoicing Compliance, 10th Edition

This paper outlines in detail the global trend towards real-time tax ‘clearance’ of invoices and how this impacts businesses in their day-to-day operations and business-to-business transaction automation strategies.

Since the last edition, the trend towards compulsory transaction-oriented integration of e-business systems with public authorities has continued to accelerate. The growing consensus among e-invoicing and VAT professionals is that indirect tax controls are quickly evolving towards real-time whereby tax administrations essentially become a ‘third trading partner’ in the exchange of sales and purchasing data between suppliers and buyers.

Download this paper for our insight into how companies can ensure their push towards automation with tax administrations doesn’t end up fragmenting their digital transformation of business processes.

19 Things About Compliant Invoice E-archiving

Most enterprises already have one or several solutions for
storing electronic data and documents. Such content management or other applications often include excellent features for aggregation, indexing, analyzing and general management of
a company’s information resources.

However, when storing original electronic invoices and similar legally critical documents, such solutions may not offer the level of legal requirement monitoring, specific regulatory compliance features and documentation that is needed for multi-country legal archiving.

In this guide our experts look at the international requirements for compliant e-archiving and how we ensure our partners and clients remain compliant with the Sovos eArchiving solution.

Trends: Insurance Premium Tax

Tax Compliance for Tomorrow

It’s no surprise that the pressures on governments globally to raise revenue, close loopholes and reduce fraud, continue to mount.

Across Europe within the last 12 months we’ve seen this increasingly with tax authorities taking steps to improve efficiencies with technology at the forefront.

This report takes a holistic look at the insurance premium tax compliance landscape.  It looks at what’s driving increasing governmental demands and the challenges insurers face.  It contains the views and thoughts from the Sovos global practice including our indirect tax, e-invoicing and other subject matter experts from across the organisation.

Bridging the IT-Tax Compliance Gap

WHITE PAPER

Compliance Mandates Around the World Have Elevated the Importance of Tax.

It is more important than ever that IT decision- makers and in-house tax and finance professionals enter into meaningful, strategic conversations about how—and why—to accelerate digital transformation to respond to invasive new tax mandates.

Read more and download the pdf.

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Overcome the hidden barriers to AP tax compliance

Meeting the challenges of accounts payable (AP) automation in the new world of digital tax requires two important components: modernization and consolidation of disparate AP systems and integration into SAP. Companies that don’t have their AP resources in line with domestic and international tax mandates risk not only resource-sapping and potentially costly audits, but also diminished cash flow, supply chain interruptions and strained supplier relationships.

AP tax compliance is a critical component of any SAP shop’s implementation strategy, including the move to SAP S/4HANA. AP leaders ignore it at their own risk. 

Get the free Accounts Payable Tax Compliance white paper and learn:

  • How to solve AP automation challenges that occur when tax authorities require data at the transaction level
  • How to overcome supplier errors and AP system diversification
  • How to avoid costly AP-induced audits
  • How to ensure both compliance and data purity in AP e-invoicing processes
  • The different variations of digital e-invoicing and VAT reporting AP teams will face

Online Reporting for Unclaimed Property

With each state, plus a few other areas, having its own rules for compliance, managing unclaimed property is massively complicated. Reporting online can ease a lot of the pain, but the process comes with challenges as well. Learn how to master online processing and stay compliant despite the murky regulations surrounding unclaimed property.

The Gartner 2021 CIO Agenda: A U.S. Perspective

REPORT

Gartner Survey 2021 CIO Agenda: A U.S. Perspective

Sorting out tax compliance issues was not traditionally on the top of the IT organization’s to-do list, but compliance mandates around the world have elevated its status. It is more important than ever that IT, tax and finance leaders work together to accelerate this other digital transformation – the one driven by global tax authorities. As CIOs learn more about the role they have to play in compliance, they’re also facing other challenges and opportunities.

In the Gartner 2021 CIO Agenda: A U.S. Perspective, “respondents in the U.S. report digital business acceleration in the face of COVID-19 and an increased opportunity for business redesign. Despite being global pace setters, U.S. CIOs have a lot of opportunity to leverage digital innovations for value creation.” 

To read more Gartner findings about how U.S. CIOs continue to evolve in their roles, complete the form for complimentary access. 

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GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and is used herein with permission. All rights reserved.

Gartner, 2021 CIO Agenda: A U.S. Perspective, Chris Howard, 5 January 2021

How to Get a Handle on Tax Information Reporting This Season

Year-end is quickly approaching, which means so is the 2021 tax season. Sovos has been helping companies Solve Tax for Good for over 30 years with our integrated solutions that make managing tax obligations and complying with IRS withholding and information reporting requirements faster and easier. And during this time, we have seen many businesses fall victim to last-minute hurdles and obstacles related to year-end reporting. 

Download this white paper to learn some of the most common issues organizations face during year-end 1099 reporting, along with best practices to help your business avoid them.

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What’s different this year?

in 2020 the IRS unearthed the Form 1099-NEC for reporting nonemployee compensation payments. This means businesses can no longer report nonemployee compensation amounts in Box 7 of Form 1099-MISC. 

Since the Box 7 amounts were moved to the new NEC form, the IRS redesigned the 1099-MISC form too. In addition to renumbering the boxes on the form (after Box 7), new reporting requirements were added for a couple of scenarios. 

Further, Form 1099-NEC is now included in the combined federal state filing (CF/SF) program. However, many states have released direct state reporting requirements for Form 1099-NEC information. This is especially impactful to businesses because in the past they could include that information in the single file that they submitted to the IRS. Now, businesses will need to create separate technical files as well submit each of them separately to each state that requires direct filing of the information.

When preparing for your 10-series forms year-end reporting, consider the following:

There are a range of preparations and mitigations businesses can put into action. Among the most important steps to be taken are to:

  • Tracking due dates
  • Communicating due dates to partners and stakeholders
  • Testing data quality
  • Testing all outputs
  • Balancing withholding amounts before filing
  • Filing extensions
  • Communicating changes to recipients
  • Balancing file data
  • Protecting recipients private information

One of the biggest issues that we see in tax reporting is organizations that treat this as a once-a-year obligation. Organizations that wait until the end of the year to begin preparing for the busy month of January often find themselves working long hours, mailing out incorrect tax information and filing corrections and amended corporate returns. Protect your organization while reducing time spent by treating your 1099 tax information reporting process as a year-round responsibility.

Trends and Updates on VAT Compliance

VAT Trends: Toward Continuous Transaction Controls, 12th Edition

Welcome to the 12th edition of Sovos’ annual trends report, “VAT Trends: Toward Continuous Transaction Controls” 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 and are demanding unprecedented insight into economic data to close revenue gaps.

The focus of this year’s report is on four emerging megatrends with 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.
  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.
  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.

Continuous transaction controls 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.

In addition, this report 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.

Sales Tax Toolkit: Your Guide to Annual Filings

To help you better manage your time, meet sales tax deadlines and avoid costly penalties, we’ve compiled a toolkit to get you through the sales tax annual filing period.

Prepare for January sales tax filings now

If you continue to file taxes the same way you always have and hope that nothing is overlooked, it might be time for a new strategy. Remember, hope is not a plan. Sovos has what you need to ensure that you stay compliant, even as regulations change.

This Sales Tax Toolkit includes:

  • A filing deadline calendar for your returns due in January.
  • A compliance filing checklist to reduce your risk of inaccurate reporting and penalties.
  • Information on which states require annual reconciliations, and how to file them.
  • Tips from our Managed Services team on maintaining work-life balance and avoiding burnout.

When you download our Sales Tax Toolkit, you’ll also have the option to select a gift for added boost when it comes to juggling the increased workload come January.

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January is right around the corner which means the time to prepare for sales tax filing is now. If you continue to file taxes the same way you always have and hope that nothing is overlooked, it might be time for a new strategy. Remember, hope is not a plan. Sovos has what you need to ensure that you stay compliant, even as regulations change.

The sales tax filing process is often just that: a process. But it doesn’t have to be that way. Understandably, January is a stressful time of year; businesses often have monthly, quarterly and annual returns to finalize and submit. If you operate in multiple states – either with physical presence or as a remote seller – there may be numerous state annual reconciliations to consider. Additionally, local, state and federal tax regulations are ever-evolving, meaning businesses must remain vigilant to avoid inaccurate reporting that can lead to hefty financial penalties. 

It is also easy to feel overwhelmed with ensuring sales tax filing compliance. Burnout can happen when businesses lack necessary tools that help employees stay on track with tasks, while also maintaining a healthy work-life balance. When your employees are stressed, it may be more difficult for them to focus, which could lead to overlooked steps with your sales tax filing. But is there really a way to guarantee that balance? How can businesses make sure all sales tax filing deadlines are met without overwhelming employees? 

For anyone who has thought, “Help me sales tax,” we understand. Whether you are concerned about annual sales tax liability, updates at the local or state level or just with meeting all sales tax filing dates, Sovos is here to help. Our team understands that the sales tax filing landscape is changing and we want to provide you with the knowledge and tools you need to ensure state sales tax compliance.

Brexit and VAT

Brexit is here with a new trade deal agreed between the EU and UK, but that’s not the end of the story for businesses. Ensuring VAT compliance of goods is essential to any successful Brexit plan as is recognizing that not all EU Member States have the same requirements.

Now is the time for businesses of all sizes and across all industries to take action and remain VAT compliant as the UK begins its new trading relationship with the EU.

 

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What will change in the new year?

From 1 January 2021, the way in which cross-border trade between the United Kingdom and the European Union is conducted will undergo seismic shifts. At the end of the Brexit transition period in December 2020, the UK became a third country in relation to the European Union. As a result, the concept of acquisitions and dispatches is removed for trade between the UK and EU, to be replaced instead by exports and imports. This has far reaching implications for VAT accounting, importing and supply chains, and it is crucial that businesses consider postponed import accounting for VAT, in addition to VAT registrations and the need for fiscal representation.

What are the crucial steps businesses must take?

There are a range of preparations and mitigations businesses can put into action. Among the most important steps to be taken are to:

  • Identify all supply chains that could be impacted by Brexit
  • Determine in which EU Member States VAT registrations must be maintained
  • Establish whether any new VAT registrations will be required
  • Consider changes to customs requirements, such as EORI numbers in the UK and EU
  • Plan for changes to VAT reporting requirements
  • Understand where fiscal representation may be required, and take steps to secure it if necessary

Whether your planning is complete pending review, at a mid-stage point or as yet uninitiated, assistance is on hand. Our Brexit and VAT white paper offers vital information on how best to understand the impact of Brexit on VAT and will provide actionable guidance on how best to future-proof your business activity into 2021 and beyond.

Sovos is a trusted European VAT expert, providing a single tax partner for compliance everywhere you do business. We solve tax for good, and can help you centralise, standardise and automate all your VAT and fiscal reporting needs

Sovos Digital Series

Get the 411 on Sales Tax & NetSuite

Have questions about sales tax compliance and NetSuite? We got you covered.

Enroll in the Sovos Digital Series to hear:

  • How the latest NetSuite & Sovos enhancements can help you manage your end-to-end sales tax needs
  • One NetSuite customer’s sales tax journey and best practices to help reduce your sales tax burden
  • FAQ’s about sales tax calculation, exemptions, and reporting through COVID-19

Part one: What’s New with NetSuite & Sales Tax

Vidcast discussion on how users can leverage their existing NetSuite environment to lessen the burden of sales tax compliance. Recorded April 16, 2020.

What you’ll hear about:

  • How to enable SuiteTax and the compliance benefits of doing so
  • Digitization trends in sales tax and enforcement
  • Economic nexus considerations and compliance flags in the age of COVID-19

Part two: A NetSuite Customer’s Sales Tax Journey

GoKeyless shares best practices from their experience in looking for an automated sales tax solution.

What you’ll learn:

  • Challenges facing NetSuite customers when trying to comply with new sales tax obligations
  • What to do when your business has outgrown your manual sales tax processes

Part three: Sales Tax Toolkit

Compliance resources to keep you on track.

What you’ll get:

  • Our COVID-19 blog featuring the latest tax news
  • Downloadable compliance readiness checklist
  • State by state compliance regulations updated in real time

Part four: Current sales tax considerations for businesses using NetSuite

Learn how companies like yours are navigating the complexities of sales tax compliance given the additional challenge of a national pandemic. Recorded May 12, 2020.

What you’ll hear about:

  • The most frequently asked questions NetSuite customers have for Sovos
  • How businesses are handling sales tax enforcement and economic nexus challenges
  • The impact of COVID-19 on business operations and sales tax related projects

2020 State of Sales & Use Tax Inaugural Report

The report provides a here and now assessment of sales tax administration, examining trends in nexus laws and regulations and how current economic circumstances brought on by the COVID-19 pandemic are impacting state’s abilities to collect taxes owed and preserve revenue streams.

Governments at every level have expanded investments in technology to digitize the sales tax collection process and close existing tax gaps. When combined with the Wayfair decision, which vastly expanded the nexus footprint of organizations, states moved quickly to establish new regulations to maximize income. This Sovos report details how rapidly the sales tax landscape is evolving.

This new approach to sales tax is forcing organizations to reexamine how they facilitate processes internally to ensure compliance. While manual processes and custom solutions may have been suitable in past environments, increased levels of speed, oversight and complexity now demand more sophisticated methods. In the report, our experts explore the relationship between tax and IT and why better collaboration between the two should be an integral part of your compliance strategy.

Overcome the Challenges of Tax Reporting for Cryptocurrency Exchanges

Download your complimentary copy of the Tax Reporting for Cryptocurrency Exchanges report for concise and clear analysis of emerging guidance on tax reporting challenges and solutions for exchanges and traders.  

This report was created by the tax reporting experts at Sovos and CryptoTrader.Tax.

Download your free report and get:

  • Insights into rapidly evolving IRS guidance on the reporting of cryptocurrency gains and losses
  • The evolution of the 1099-B and what it means for exchanges and traders
  • Analysis of various approaches being implemented by exchanges today
  • The benefits of modern software for cryptocurrency accounting and reporting

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Insurance Premium Tax: Back to Basics

Taxes on insurance are fragmented. Achieving compliance can be a headache requiring specialist knowledge. No two jurisdictions are the same and currencies, rates, deadlines and location of risk rules may vary by country.

For those tax teams new to insurance premium tax (IPT), this whitepaper provides a useful guide on the principles and foundations required for compliance.

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