This blog was last updated on June 27, 2021
Value-Added Taxes Are Complex
Value-Added Tax (VAT) is tax that is levied at every stage of the supply chain, on both goods and services. Every major economy except the United States (US) levies a form of VAT and each does so with its own set of rules for compliance and reporting. Apart from compliance, processing, and reporting of VAT, proper calculation of VAT for businesses can be quite complex.
Sovos understands these complexities and provides automation to calculate VAT based on transactional information supplied to our tax engine via your ERP. Our tax engine analyzes the information supplied in order to determine the most accurate place of supply, the party responsible for remitting VAT, and the VAT rate that applies on the transaction in each country where VAT is due.
Once the correct tax is determined, Sovos VAT Reporting is able to synthesize the data into various VAT reports. It is even more challenging to achieve and ensure an accurate and efficient processing and reporting of VAT. Each country basically has its own set of requirements for administrating and reporting it. This varies from the frequency with which VAT returns are required (monthly, bi-monthly, quarterly, semi-annually, annually etc.), the type of returns to be submitted, the number of information boxes to be completed and the submission and payment deadlines. Sovos VAT Reporting identifies errors, so the chances of your company submitting an incorrect VAT return are greatly diminished; thereby reducing the risk of penalties, fines, or audits.
Interested in learning more about VAT? Visit Sovos VAT Reporting.
