The 13th Edition of Trends Provides Insights on Current and Near-Term Legal Requirements for Companies Searching for Solutions to Mandatory e-Invoicing Laws
BOSTON, Jan. 19, 2022 — Global tax software leader Sovos today released its 13th annual Trends report, the industry’s most comprehensive study of global value-added tax (VAT) mandates and compliance controls. The report is a comprehensive look at the world’s regulatory landscape, highlighting how governments across the world are enacting complex new policies and controls to close tax gaps and collect the revenue they are owed. These policies and protocols affect all companies conducting business on a global scale no matter where they are headquartered.
This year’s Sovos report examines how large-scale investments in digitization technology in recent years have enabled tax authorities in much of the world to move away from legacy reporting and ad hoc audits to real-time data analysis and always-on enforcement. Empowered by new technology and capabilities, government authorities have inserted themselves into every aspect of business operations and are ever-present in company data.
Through new, government mandated e-invoicing laws, tax administrations are increasingly requiring businesses to send them what amounts to the entire content of their accounting systems, on demand as part of an audit or as a periodic report. This level of access to company finance ledgers creates unprecedented opportunities for tax administrations – and other parts of government, including law enforcement and competition authorities – to triangulate a company’s transaction source data with their accounting treatment.
“Governments increasingly have all the evidence and capabilities they need to drive aggressive programs toward real-time oversight and enforcement,” said Christiaan van der Valk, lead author of the report and vice president of strategy and regulatory at Sovos. “We have already seen these programs envelop most of South and Central America and are quickly spreading across countries in Europe, such as France, Germany and Belgium, as well as Asia and parts of Africa. We are seeing firsthand the pace at which governments are establishing and operationalizing new standards of oversight and just how quickly they are moving to enforce these standards.”
With always-on enforcement, data contained in systems such as ERPs, accounts payable/receivable, procure to pay, order-to-cash, supply chain and logistics, and HR and payroll have to comply with local standards and mandates as the information traverses IT infrastructure. Failure to comply may lead to business disruptions or even stoppages.
“This new level of imposed transparency is forcing businesses to adapt to how they track and implement government mandated e-invoicing changes all over the world. To keep pace, companies need an IT centric strategy that enables centralized control, no matter how many countries they conduct business in,” said Steve Sprague, chief strategy officer and general manager of global VAT at Sovos. “Bottom line: governments are in your data, and if you don’t comply with their mandates, they can shut you down.”
To download your complimentary copy of the report, click here.
About Sovos
Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe, and is owned by Hg and TA Associates. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
