Germany and e-invoicing for B2G mandatory by 27 November 2020

vlag UK

The adoption of the EU Directive 2014/55/EU of 16 April 2014 (the 'E-Invoicing Directive') made the use of electronic invoicing during public procurement mandatory. An 'electronic invoice' means an invoice that has been issued, transmitted, and received in a structured electronic format, which allows for its automated processing.

Greece update: press release of June 12, 2020 concerning Mydata & e-books obligations

vlag griekenland

On Friday, June 12, 2020, Greece Ministry of Finance, together with Independent Public Revenue Authority, published about the digital transmission on the platform of the Electronic Books myDATA.

Our solution realizes that the divested business is operating SAP quickly and in a cost-efficient manner

vlag UK

M&A Divestiture deals during planning and execution present lots of SAP challenges. Time and IT costs are critical drivers for such deals. By using our patented solution (M&A Divestiture Patent – US9330094B2 for SAP) and approach, organizations significantly reduce the cost and delivery time for successful data separations.

India and e-invoicing reporting mandatory by October 2020

vlag UK

We have developed an SAP-integrated solution with the cockpit to select reportable outgoing invoices, create periodic Indian e-invoicing, E-submission of Indian JSON files, and control reports and the functionality. Although not yet a mandatory requirement, the solution is ready for FI invoicing. We can add the QR Code, IRN, into the SAP script. The other key GST processes features we developed for optimum GST management are electronic waybill ('E-way bill') and GST returns, GST reconciliations and GST input credit utilization against its eligibility.

A patented application for 'state of the art' SAP Data Management

vlag UK

Data is the most valuable asset for any organization. It is being generated at unprecedented speed and already drives decision-making processes and generating extraordinary value. Whether organization SAP database expansion is a result of new features & functions, additional users, intensified use of particular applications, or mergers & acquisitions, we can help reduce the stored amount of your data. Our effort will increase technical ROI and maintain system sustainability and reduce end-user and IT workload.

Purchasing add-ons: legal and tax assessment support

NO

Tax Engine Support (TES) supports clients during vendor selection and contractual negotiations about delivery terms & conditions. Besides, TES performs quality review during 'User Acceptance Testing' (UAT), and TES assesses whether the add-on meets all the delivery terms & conditions agreed with the software vendor.

PwC and GE deal: start of a new beginning?

1. Final

PwC has taken over the global tax function of GE (600 people):"We will also integrate GE’s tax technologies and end-to-end global processes into our own significant investments, allowing us to meet all of GE’s tax needs seamlessly. From compliance to deals to defense and controversies to sophisticated planning, our team will cover everything for GE while also providing that same expertise and access to tax technologies and process to other clients."

VAT determination of AP invoices

time

The purchase order (PO) and the vendor invoice are the VAT relevant data sources used to determine the VAT treatment of incoming invoices. However, the vendor invoice data is in general not available in SAP. In order to automate the VAT determination, it is essential that external information is added in an easy and intelligent way.

SAP add-on for SAF-T Norway (2020)

NO

Standard Audit File for Tax Purposes for Norway first version was ready in March 2016. It was limited to account specification (general ledger), and supplier and customer specification (subsidiary ledger). Required fixed data was also included. The new 2020 version of the SAF-T Financial will consist of source documents such as detailed invoice data and movements of goods and asset transactions.

Converting the sales middleman function from Commissionaire to LRD

613 01535203n

The objective is to bring commissionaire arrangements within the framework of dependent agency PE. Companies are converting commissionaire to LRD. Once a commercial and tax-efficient structure is determined— one that addresses both historical and potential risk - it is time to take the theory behind the structure into the realm of practice.

Intrastat reporting and SAP

623 05850553n

The Intrastat reporting is one of the most complicated reports. Intrastat reports are primarily based on the Sales and Distribution and the Materials Management modules as movement of goods data are the starting point for the Intrastat reports. It is not like VAT reporting based on the Financial accounting module. The biggest challenge with SAP Intrastat reporting is related to the completeness and correctness of the relevant Intrastat transactions. 

Key Group an SAP partner

Logo Keygroup f.jpg kopie

For the success of our clients, we connect 'Taxation, Technology', and Controls. We are recognized as a leading boutique for 'Taxation and SAP' by our clients, employees, and business partners. We develop and install turn-key SAP add-ons that enhance standard SAP to timely submit tax reporting, and that optimizes the SAP VAT determination logic.

Brexit - changes in SAP: assess, redesign and test

phenixbenefitstechnology

Although the EU VAT regime will remain in place until negotiations between the UK and the EU will be concluded, it is most likely that new UK VAT legislation will come into force in the spring of 2019. It seems you have enough time, but I highly recommend to anticipate on these law changes as soon as possible.

Add new talent and competencies

flyer8

Technical tax expertise has become more a basic skill from the adviser’s perspective. Data analytics, IT and accounting capabilities as well the soft skills of the adviser are—and will become—the key differentiator. Due to all of the technological developments, this is already part of our present and future. Technical tax advice must be implemented in systems, processes and controls.

Poland Whitelist of VAT taxpayers

SAPPartnerLogo1

Starting September 1, Poland will publish online a new database of VAT registered businesses. It is a list of VAT payers, which contains several important information about entities conducting business activity in Poland. The list will include, among others, bank account numbers of VAT taxpayers.

Creating XML SAF-T Structures directly in SAP ECC

SAPPartnerLogo1

Our SAF-T SAP add-on runs over SAP ECC, is compatible with OECD standard and covers the steps of creation of necessary structures in XML format including E-submission with signature and encryption.

When is standard SAP (in)sufficient?

623 06034773n

If full ‘VAT automation of Accounts Receivable (AR) and Accounts Payable (AP)’ and ‘being in control’ are important objectives of your organization, it is important to understand what exactly makes Standard SAP not functioning optimal from an indirect tax perspective. Only then it is possible to validate whether a company’s objectives can be achieved via upgrading Standard SAP functionality and/or implementing an external tax engine.

SAP add-on solution for VAT Information Exchange System to validate correctness of VAT numbers (2020)

SAPPartnerLogo1

From 1 January 2020, four Quick Fixes will be introduced to simplify and harmonize the EU VAT rules of intra-EU supplies of goods, that will address the vital importance of VAT number check again.

SAP - submitting close to real time data to tax authorities

SAPPartnerLogo1

The Italian, Polish, Lithuanian and Spanish authorities passed a series of measures aimed at detecting and combating tax fraud. The aim is to get close to real-time information of company transactions, which will allow the tax authorities to perform a more efficient tax audit and reduce processing time. Companies face business challenges to implement these new requirements.

Manage reputational tax risks

649 05658057n

Reputational risk is a key element in tax risk management as it is it not only considers individual tax risk but also sees how tax risk may influence the positions in other areas, negatively or positively.

UK MTD - SAP add-on for MTD UK (2020)

vlag UK

Starting April 2020 the digitally linked VAT accounting data will have to be submitted to the tax authorities either periodically or on request. That data will be used to review whether the numbers of the nine VAT returns submitted are correct (tax audit (almost) real-time).

A Tax Magazine specific about Tax Assurance

header VakbladTA

Vakblad Tax Assurance describes all interdisciplinary aspects of national and international developments regarding tax risk management, business and tax environment, tax and business operations and monitoring and testing. An integrated tax function is valid only if one has knowledge of and experience with commercial, financial and fiscal strategic thinking, soft controls, the (im)possibilties of processes and protocols, ICT, compliance, 'monitoring and testing' and change management.

Statistical sampling: quantify tax risks

677 03370687n

In order to quickly gain insight into the level of tax risks (i.e. calculation of the potential assessment), statistical sampling can be used. By selecting a few elements (euros), the reliability of the composition of tax items can be determined to a high degree of certainty, and on the basis of identified errors in the sample, the exact amount of additional tax assessment can be calculated.

SAP add-on: SAF-T and e-invoicing changes in 2020

1iphenix9

Key Group (KG) supports its clients by enhancing SAP for tax. That means implementing new tax audit methods such as SAF-T and e-invoicing, but also it optimizes SAP's VAT determination logic to ensure that manual intervention is limited or avoided. Below an overview of new legal changes and introductions, that KG will support.

Tax relevant data for TP and VAT, the 'Why', 'What' and 'How'

Screen Shot 2017 03 16 at 14.16.20 2

Tax moral is shifting. More often what is (still) legally allowed may not automatically be accepted by the public opinion. Reputational damage is imminent. Both on direct and indirect taxation the tax authorities have set their priorities. The tax authorities not only want to receive more tax data, but also faster and more often.

Approaches and models

phenixtax

A Tax Strategy should cover all taxes and all key business locations and should be aligned to the overall business strategy. A tax strategy document should also include guidelines as to acceptable planning, which is then further detailed in a Tax Planning Policy. 

The UK 'Making Tax Digital' for VAT

1iphenix9

HMRC's 'MTD for VAT' aims to avoid 'manual entry' mistakes, and that all underlying VAT line items of the VAT return are not only digitalized but at the end readily available so HMRC can perform soon closer to real-time tax audits. We explain MTD UK in detail.

The auditor is not (yet) a risk analyst

Screen Shot 2017 03 16 at 14.16.20 2

The external auditor’s task is only to provide an opinion whether the annual accounts provide a true and fair representation of the company's affairs. He or she is not asked to provide a statement regarding the accuracy or the acceptability of the submitted return for corporate tax, income tax, VAT, etc.

The ways to measure VAT performance

toets en bril

When high risk indirect tax areas and lowest performing VAT processes - that have a direct impact on the company's VAT objectives - have been identified, the next step is to measure the performance in term of effectiveness and efficiency of each of these processes. Measure the magnitude of that problem, determine why the problem exists, and generate a set of solutions to ensure that the problem goes away.

Strategic partnership between the Key Group and INSynQ

Logo Color

The Key Group and INSynQ announce their strategic partnership. We have developed as you can see in the articles of our brochure various KG SAP add-ons and SAP solutions for VAT automation. Together we will also provide high-quality SAP VAT consultancy services to our clients.

Italy - Quarterly informative report VAT invoices data

SAPPartnerLogo1

The Italian authorities passed a series of measures aimed at detecting and combating tax fraud: "Quarterly informative report VAT invoices data". The aim is to get close to real-time information of company transactions, which will allow the tax authorities to perform a more efficient tax audit and reduce processing time. Companies face business challenges to implement these new requirements.

Mandatory e-audit files

600 03865601n

Tax authorities, due to technological innovations, have become increasingly better in executing their tax audit. The probability that the Tax Authorities will issue additional assessments and penalties in the near future because errors in indirect tax are detected, increases by the day. The SAF-T standard, originally created by the OECD, is intended to give tax authorities easy access to the relevant data in an easily readable format. This leads to much more efficient and effective tax inspections.

eInvoicing requirements in Hungary per July 1, 2018

HU

From 1 July 2018, taxpayers are as stated earlier obliged to provide within 24 hours invoice data for domestic transactions with a minimum VAT amount of HUF 100,000 (322 EUR). The ERP system must be able to detect sales invoices meeting reporting requirements: the minimum VAT amount. To be able to comply with the requirements and provide the data on in time, a taxpayer needs to develop either tooling or purchase a solution.

Being ready for GCC VAT introduction when operating SAP

GCC

The Governments of the Gulf Cooperation Council (GCC) - Bahrain, Kuwait, Oman, Qatar (status unknown due to GCC politics/friction), Saudi Arabia and the United Arab Emirates that make up GCC - are committed to form a common framework for the introduction of value added tax (VAT) in the region. In order to achieve conformity within the GCC, it is anticipated that the six member states will all aim for implementation of VAT during the period commencing 1 January 2018 or by the end of 2018.

Higher on the CFO's agenda

641 06058668n

The importance of indirect tax has increased over the last couple of years. While the rates for direct tax, corporate income tax, are decreasing, the rates for indirect tax keep rising. Time for Richard Cornelisse, editor of Global Indirect Tax Management, to act on that: ‘At multinational companies we’re easily talking about amounts of over 5 billion euros of indirect tax flowing through the books. Yet according to big4 surveys, the related control mechanisms are still inadequate. Not only can an error in the accounts lead to major additional tax assessments and substantial penalties, with amounts like these, it can be devastating for the reputation of a listed company.’

eInvoicing requirements in Italy per January 1, 2019

500px Flag of Italy.svg

Starting January 1, 2019, in Italy a mandatory electronic invoicing obligation will be in force for the supplies of goods or services. This e-invoicing obligation - similar like Spain and Hungary - is about detecting and combating VAT fraud/tax evasion, but also to stimulate company's to get ready for the digital age. Taxpayers will be forced to get their ERP systems to send and receive in XML format e-invoicing data via the Interchange System ('SDI').

A cost efficient way to submit SAF-T files and perform risk management

SAPPartnerLogo1

A SAF-T SAP add-on solution developed together by ‘Tax Assurance and certified SAP add-on specialists’ is now available for Poland, Lithuania and Norway and is scalable. The SAP add-on is extendable to other countries that uses the OECD framework as the basis for SAF-T reports.

Business case for investments

money

It is essential that the tax function has an excellent relationships with the business, senior management, finance and IT as a mutual understanding of the impact of the company's tax challenges and the potential solutions should exist to realize that investment budgets are actually made available. 

Hungarian update: eInvoicing requirements starts 1 July 2018

HU

From 1 July 2018, taxpayers are as stated earlier obliged to provide within 24 hours invoice data for domestic transactions with a minimum VAT amount of HUF 100,000 (approximately 322 EUR).

Norway introduces SAF-T to improve tax inspections

SAPPartnerLogo1

Norway is introducing SAF-T reporting for corporate entities, either resident or with physical presence in Norway (VAT registered businesses). From 1st January 2017 onwards it is required to provide SAFT-NO files in XML format on request of the Norwegian Tax authorities.

Fully VAT compliant realistic?

airport1

Managing risk is about making decisions at all levels of an organization, to limit the effect and likelihood of threats happening and to increase the effect and likelihood of opportunities. Setting realistic objectives is the starting point for any successful change effort. In order to increase indirect tax function effectiveness it is important to set SMART objectives. 

Italian update and mandatory e-invoicing

500px Flag of Italy.svg

Starting January 1, 2019, in Italy a mandatory electronic invoicing obligation will be in force for the supplies of goods or services. This e-invoicing obligation - similar to Spain and Hungary - is about detecting and combating VAT fraud/tax evasion, but also to stimulate company's to get ready for the digital age. Taxpayers will be forced to get their ERP systems to send and receive in XML format e-invoicing data via the Interchange System ('SDI').

Publishing your tax strategy

UK

Certain businesses have to publish their tax strategy and be able to demonstrate how the tax strategy is being applied in practice. The strategy should set out the business’ attitude to tax risk, its appetite for tax planning and its approach to its relationship with HMRC. Although it applies to the UK, being consistent across jurisdictions is important as these obligations might be a global tax trend.

Shift from direct tax to indirect tax

649 05658057n

CFOs / Head of Tax apparently still focus more on direct tax than indirect tax. This is interesting as from a tax revenue perspective the current trend is a shift from direct tax to indirect tax by decreasing direct tax rates and increasing VAT/GST rates. Corporate income tax rates are continuing to fall in many countries.

UK: Making Tax Digital (MTD)

vlag UK

An API to HMRC is mandatory from 1 April 2019. HMRC will, however, introduce a soft landing period' until 1 April 2020. Taxpayers will, in the end, have to transfer data without manual intervention. Re-keying of large amounts of data and using copy/paste functionality will be forbidden. When Taxpayers use flat files such as CSV files and automated downloads, this may be satisfactory for the ‘digitally linked’ requirements. A proper VAT configuration of a company's tax determination logic is thus crucial for being MTD compliant.

What is considered tax avoidance

phenix6

"Tax avoidance is an attempt to exploit legislation to gain a tax advantage that was never intended. This often involves artificial transactions that serve little or no purpose other than to produce a tax advantage. But tax avoidance is not the same as tax planning, which involves applying tax legislation in the way it was intended - for example saving in an ISA (Individual Savings Account) where you don't pay tax on the interest."

Criminal charges and jail time

677 03370687n

59 percent of respondents (53 percent in 2014) expect the personal liability of compliance officers to increase in 2015, with 15 percent expecting a significant increase. Compliance officers or its Executives at firms as diverse as Swinton Insurance, Bank Leumi, Bank of Tokyo-Mitsubishi, Brown Brothers Harriman and Deutsche Bank (DB: VAT fraud) having been fined, banned or jailed (or a combination).

Norway SAF-T delayed to 2020

NO

Norway has announced to introduce an on-demand mandatory Standard Audit File for Tax (‘SAF-T’) requirement for taxpayers starting from 1 January 2020.

Identify the lowest performing process

phenix5

The indirect tax objective is to make sure that VAT processes and controls operate as effectively and efficiently as possible. That means determining whether the current processes operate satisfactorily 'as is' or need to be improved, factoring in any potential or existing differences and taking into account the complexity of the existing processes and the variations between these processes in each of the business units to be supported.

Avoid unnecessary VAT rework

649 03078391n

Hidden factory or hidden operation: the rework and cover ups, the hours and days of wasted time in a company of people who constantly correct mistakes . The objective is to make the hidden factory visible (measure/calculate ROI) and as result returns precious time and money to the business. It is about extra man-hours, additional costs due to rework (credit/debit notes) and retrospective corrections and/or disclosures. Example: how much rework is required before numbers received from finance systems can be used? 

SAF-T Portugal annual report obligation starting 2019

vlag portugal

In Portugal, in addition to the existing monthly SAF-T submission listing of all sales invoices for VAT purposes, businesses are required to provide annual accounting file in SAF-T format. According to a recent announcement from the Portuguese tax authorities, Despacho n.º 45/2018-XXI from 2 February 2018, the obligation to provide an annual file for completion of IES is delayed with one year.

BEPS and banking and insurance

OECDs BEPS involving interest in the banking and insurance sectors2

28 july 2016 - BEPS action 4 - discussion draft on approaches to address beps involving interest in the banking and insurance sectors. The report on Action 4, Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, establishes a common approach to tackling BEPS involving interest, but highlights a number of factors which suggest that a difference approach may be needed to address risks posed by entities in the banking and insurance sectors.

When expertise is needed upfront

business3

The tax function should ascertain proper implementation and determine the impact of changes in businesses, laws and regulations on implemented tax planning. Getting ahead of possible problems at the planning stage before they arise in practice is one critical way to make sure that the company reaps the benefits. When the business model changed as a result of the implementation of a centralized procurement model, this could create not only VAT risks, but commercial risks as well. 

Greece is introducing also mandatory e-invoicing

vlag griekenland

Greece intends to roll out a mandatory application of electronic invoicing and electronic bookkeeping. For companies that are involved in the public procurement, the law will be in force as of 2019. From 1 January 2020, this tax requirement will be mandatory for all B2B and B2C transactions.

Mini One Stop Shop for VAT

EU VAT

From 1 January 2015, telecommunications, broadcasting and electronic services are always taxed in the country where the customer belongs – regardless of whether the customer is a business or consumer – and regardless of whether the supplier is based in the EU or outside.

VAT findings for benchmarking

phenix3

Benchmarking exercises against trends in the indirect tax market can be done via global surveys that capture info on tax function, attitudes and priorities. These surveys are useful as they give insight into what others are facing or have faced and how you could improve yourself.

About SAF-T and e-invoicing - country specific methods without harmonization

Logo Keygroup f.jpg kopie

Tax administrations use technology to improve tax audit effectiveness as combating VAT fraud is a high priority. Digitalization of tax is a trend, so more countries will follow soon. Every jurisdiction has its country-specific way and tax requirements. Countries have implemented e-invoicing with (almost) real-time electronic data submission or SAF-T based methods.

e-Learning modules on VAT

Unknown

VAT eLearning programme developed by the European Commission consists of 12 individual courses. The eLearning modules on value added tax (VAT) aim at presenting the fundamental elements of the VAT Directive.

'Brexit' is it already time to act

main

Relax, the VAT law will probably not change in the next 2 years. The UK must first give the European Council notice of its intention to withdraw and a 'Brexit' agreement has to be negotiated.

SAP VAT health check for e-invoicing data requests in Hungary, Italy and Spain

Logo Keygroup f.jpg kopie

The Key Group offers an SAP health check specifically on e-invoicing data requests such as Hungary, Italy and Spain and our method is based on the legal tax requirements defined in XML format and local VAT law.

Efficiency check French VAT System

toets en bril

France faces important consolidation and indebtedness challenges. At the same time, the overall tax burden is one of the highest in the EU. There are strong economic arguments for having a simple VAT system, with a limited use of reduced rates. Finally, we suggest a number of ways to improve the efficiency of the VAT rate structure in France.

SAP activities and 'Brexit'

640 01353928n

The impact of ‘Brexit' - its VAT law change - is used to illustrate the SAP activities and resources needed when a company has to deal with a country setting change from UK to Non-EU.

Legal and technical changes for SII files in Spain

spanje

On 1 July 2018, the Spanish SII system changes. Several technical modifications become in force.

Introducing a new VAT system

working

On 16 June 2016, the Finance Ministers of the Gulf Cooperation Council (GCC) held an extraordinary meeting in Jeddah, Saudi Arabia on GCC Value Added Tax (VAT). GCC States - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates that make up GCC - will most likely introduce VAT on 1 Jan 2018 or by 1 Jan 2019 at the latest.

SAF-T what is next ... Lithuania!

SAPPartnerLogo1

In Europe SAF-T is now in force in Austria, France, Lithuania, Luxembourg and Poland. We understand that Germany, UK, Ireland, Norway and the Czech Republic are most likely next to introduce SAF-T. Lithuania is expanding its SAF-T. Starting October 1, 2016 all VAT-registered taxable persons, - including foreign companies registered for VAT - will be required to submit a SAF-T file in XML format to the LT Tax authorities on a monthly basis.

More attention for VAT is expected soon

Phenix Consulting Conduct proper tax management ext

The Big Four auditors emphasize in their Indirect Tax Surveys the increasing risks of assessments, fines and reputational damage, as the importance of indirect tax amounts flowing through the accounts is increasing and the KPIs and effective monitoring is generally missing for indirect tax.

Concrete measurable actions

649 03078391n

Setting realistic objectives is the starting point for any successful change effort. In order to increase indirect tax function effectiveness it is important to set S.M.A.R.T. objectives and define tasks: add to objective the word by ... as shown in below example. Break down larger tasks into smaller ones. 

SAP and SAF-T Poland

SAPPartnerLogo1

From 1st July 2016 onwards it is required to provide SAFT-PL files in XML format on request of the PL Tax authorities. 

Portugal - mandatory annual report - Corporate Income Tax implications for 2018 and earlier years

vlag PT

In Portugal, in addition to the existing monthly SAF-T submission listing of all sales invoices for VAT purposes, businesses are required to provide annual accounting file in SAF-T format. According to a recent announcement from the Portuguese tax authorities, Despacho n.º 45/2018-XXI from 2 February 2018, the obligation to provide an annual file for completion of IES is delayed with one year.

VAT Control Framework

623 03861939n

While the rates for direct tax are decreasing everywhere across the world, the rates for indirect tax keep rising. With multinational companies we’re easily talking about amounts of over 5 billion euros of indirect tax flowing through the books. Yet according to big4 surveys, the control mechanisms for these numbers are still inadequate.

A SAP add-on to be able to cope with SAF-T and e-tax audits

SAPPartnerLogo1

Tax authorities around the world want to receive more frequent and faster tax relevant data for e-audit purposes to analyse Corporate Income Tax (CIT) and VAT positions taken to combat VAT fraud and to determine whether actually a fair share is paid (Base Erosion and Profit Shifting: 'OECD's BEPS'). More countries will therefore move to data request to monitor and electronic audits (e-audits) taxpayers. SAP itself does not provide an E2E solution to meet these (new) legal requirements.

Italy: FAQ about mandatory invoicing

vlag IT

The FAQ concerning mandatory e-invoicing obligations in Italy. 

Why and what needs to be done

641 06058668n

Even as the world is shrinking, businesses and their growth strategies are becoming more complicated. A schematic drawing of the functions of a typical multinational today might look like a Rube Goldberg contraption—a complex of moving parts that must connect one to another for tax, regulatory, and reporting purposes. 

SAF-T Poland per 1st July 2018 extended to taxpayers with more than 9 employees or 2 million EUR sales revenue

SAPPartnerLogo1

Filing SAF-T will be mandatory for large taxpayers: employ more than 250 people or 50 million EUR sales revenue irrespective of whether they are established in Poland or not. Per 1st July 2018 this extended to taxpayers with more than 9 employees or 2 million EUR sales revenue. In order to be able to comply with the requirements and provide the XML file on request in time, tooling needs either to be developed or purchased. 

Italy: update about mandatory e-invoicing

vlag IT

Some important updated concerning mandatory e-invoicing obligations in Italy such as soft landing and digital signatures and how invoices should be stored.

Gain awareness and acceptance

1. Final

Create, protect and prove value and write a business case for investment to realize business objectives such as improve cash flow, reduce costs, improve tax processes and manage tax related risks.

VAT Fraud and liabilities

635 05551066n

59 percent of respondents (53 percent in 2014) expect the personal liability of compliance officers to increase in 2015, with 15 percent expecting a significant increase. Compliance officers or its Executives at firms as diverse as Swinton Insurance, Bank Leumi, Bank of Tokyo-Mitsubishi, Brown Brothers Harriman and Deutsche Bank (DB: VAT fraud) having been fined, banned or jailed (or a combination).

The impact on in-house tax function

Tax relevant data 1

Most topics that have been discussed on this website revolve around one central component: data. In order to function optimally, it is essential that the tax function gains timely access to the relevant tax data. The data is not only essential for tax returns but also for instance for analyses, pre-audits and tax planning.

Publish your tax strategy: guidance

649 05658047n

Behaviours and behavioural change for large corporates in particular in the UK via publising a company's tax strategy. HMRC provides guidance.  

Best in class data analysis for VAT

640 01356147n

Tax Authorities, due to technological innovations, have become increasingly better in executing their tax audit. The probability that the Tax Authorities will issue additional assessments and penalties in the near future because errors in indirect tax are detected, increases by the day. Analytics could also increase a company's efficiency and gain strategic insight. What is needed for best in class data analysis for VAT?

Relevant tax data: explaining the ‘why’, ‘what’ and ‘how’

standing

Tax morale is shifting. More often what is (still) legally allowed may not automatically be accepted by the public opinion. Reputational damage is imminent. Both on direct and indirect taxation the tax authorities have set their priorities.

EU Taxation YouTube Channel

airport1

For educational purposes the EU Taxation and Customs Union has opened a You Tube Channel that contains videos about key tax topics such as 'Tax in Schools', 'Fighting VAT fraud', 'Union Customs Code', 'How EU tax laws are made', 'Tax policy', 'VAT Action Plan', 'Anti Tax Avoidance Package' , etc.

Incorrect VAT numbers in SAP

623 03861939n

It is possible to check the syntax – the format of the VAT number, including the number of positions. However, it is not possible to check whether the VAT number is valid. To this end, the European Commission has provided an online database, VAT Information Exchange System (VIES) for the validation of VAT numbers. We checked VAT numbers during a data analysis exercise. In practice, it appears that 5 to 25 percent of the existing VAT numbers in the customers and/or vendor master data were incorrect or invalid.

More attention for VAT is expected

Phenix Consulting Conduct proper tax management ext

The Big Four auditors emphasize in their Indirect Tax Surveys the increasing risks of assessments, fines, and reputational damage, as the importance of indirect tax amounts flowing through the accounts is increasing, and the KPIs and effective monitoring missing for indirect tax.

VAT function effectiveness

business3

A key business objective in today’s complex regulatory environment is the promotion of shareholder confidence in a company’s financial statements. Finance functions of major multinationals operate within a corporate culture that places increasing emphasis on the core values of trust and integrity. Within this culture the overriding strategic imperative of many CFOs is to manage their company’s financial reporting obligations and avoid reputational risk.

Full VAT automation of AP and AR

648 01643948n

If the aim of your organization is full VAT automation of AP and AR, it is important to have a clear understanding of your material risks at hand, and your lowest performing processes in order to define the functional specifications for a solution.

Commission develops TNA software to identify fraudulent networks

unnamed document 2

To speed up the joint processing and analysis of data within Eurofisc, the Commission is currently developing TNA software for voluntary use by the Member States as of 2018.

Search engine for EU case law

613 01385144nThe European Case Law Identifier (ECLI) is a human readable and computer processable code that can – in principle – be assigned to every judicial decision from every national or European court. Its aim is to facilitate unequivocal citation of judgments and to improve cross-border accessibility of case law.

Innovation and tax audits

1341154 20200148

Tax authorities, due to technological innovations, have become increasingly better in executing their tax audit. The probability that the Tax Authorities will issue additional assessments and penalties in the near future because errors in indirect tax are detected, increases by the day. An increase of e-filing of returns but as well of e-audit capabilities. Technology will result in effective tax data collection and efficient and effective tax audits. The OECD has issued in May 2005 a guidance note on the development of Standard Audit File –Tax (SAF-T) and recommends the use of SAF-T as a means of exporting accurate tax accounting data to tax authorities in such way that can it can be analyzed easily. Mandatory data filing gives food for thought.

Towards a new and definitive VAT system for the EU

Screen Shot 2017 10 12 at 19.14.18

The Commission adopts new proposals for the most far-reaching VAT reform in the EU for a quarter of a century VAT is a major and growing source of revenue in the EU, raising over €1 trillion in 2015, corresponding to 7% of EU GDP. However, despite many reforms, the VAT system has been unable to keep pace with the challenges of today's global, digital and mobile economy. The current VAT system dates from 1993 and was intended to be a transitional system.

Transfer pricing and IT needs

1337794 65588814

From a tax controversy perspective TP documentation is important and often results in conflicting priorities within the tax function (allocation of budget and tax resources). Better resource allocation and process improvement can be achieved via (semi)automated documentations, configure ERP systems to support TP needs or implement add-on or bolt-on tools. For example, in the area of data extraction and workflow management, entity charting, document storage, real time reporting, scenario planning and data interrogation.

Verify SAP VAT configuration

649 03154412n

Verify VAT configuration A SAP review should highlight where the VAT configuration could be improved or if additional control measures should be added to the business’s Tax Control Framework. Such review can also identify where errors occurs and there are increased risks allowing a more focused data analysis to take place. After the quantification and evaluation of the risks and errors, these are assigned a risk profile for further testing of risk tolerance.

SAP end-to End solution for periodic SII files in Spain

ext

In Spain a new VAT reporting system will enter into force on the 1st of July 2017.

Spreadsheets and VAT Compliance

tables

With human error added into the equation, some defects are going to occur. If the tax function only has MS Excel to perform data transformation to make the data tax ready, the volume of procedures and controls will have to be significantly greater. The problem is that in Excel altered data can lose its audit trail back to its source: mismatches with a companies ERP system. A point of attention as ERP data is the source of truth by the tax authorities (e.g. e-audits such as SAF-T).

Roadmap to implement VAT in SAP

600 03865601n

For nearly every company, the accuracy and efficiency of local VAT compliance is completely dependent on the functionality of the underlying SAP system. Any incorrect set-up of the basic VAT configuration of their SAP systems can severely impact it’s processing. Operational errors in a system that is used to manage VAT compliance can also lead to substantial financial risks.

SAP add-on for immediate Supply of Information (SII) in Spain

SAPPartnerLogo1

SII (“Suministro Inmediato de Información”) in Spain is about changing the current VAT management system which has been in place for 30 years, introducing a new bookkeeping system for VAT on the AEAT online system, by providing all billing records virtually immediately. The new Immediate Supply of Information accelerates the gap between recording or booking invoices and the actual realisation of the underlying economic transaction. It is introduced because the current technological situation allows its implementation at this time, to improve both taxpayer assistance as taxation controls (e-tax audits).

Exceeds auditor's materiality

1174766 40509785

Tax assurance will become more and more important and included mandatory in the scope of work of an auditor. The company's reputation is at stake and substantial amounts are involved.  The current trend is a shift from direct tax to indirect tax by decreasing direct tax rates and increasing VAT/GST rates. Corporate income tax rates are continuing to fall in many countries. At multinational companies we’re easily talking about amounts of over 5 billion euros of indirect tax flowing through the books.

How does VAT actually work

phenixtax

The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the Community.

In Spain on 1 July 2017: immediate supply of Information to tax authorities in force

ext

In Spain a new VAT reporting system will enter into force on the 1st of July 2017. The new Spanish requirements will have a huge impact on many (multi)nationals that run SAP.

Fair tax and transparency

tables

Revenue losses from BEPS are conservatively estimated at USD 100-240 billion annually , or anywhere from 4-10% of global corporate income tax (CIT) revenues. The tax authorities or external auditors will investigate the parameters of a company's tax strategy.

High level: EU VAT system

phenix7

A high level overview is provided of the EU VAT system: what is subject to VAT and the right and methods of VAT recoverability. It includes also a comparison with the US Sales and Use Taxes system.

How to get ready in time for SII Spain

ext

Any SII Spain solution should be implemented on 1 July 2017 as the first mandatory submission is already 8 days later. There are rumours that submission deadline might be delayed but that is still a big uncertainty. The decision that you have to make is whether you accept non tax compliance in the worse case. If that is not acceptable you should buy the right solution and start implementing asap to be compliant in time.

Enablers of the tax function

phenix9

For a tax function to produce timely deliverables and satisfying the requirements of the board and other stakeholders, the effectiveness of tax department’s 'governance', 'operation' and 'infrastructure' are essential enablers. This article sets out the business challenges and areas of improvement for these enablers.

VAT neutrality has to be earned

600 05389478n

Often the question is asked what risk management even has to do with VAT/GST. The reasoning behind this question is that VAT/GST is typically cost neutral for most businesses: “a cash in and cash out” scenario. However, every indirect tax function knows that deductible input VAT and liable output VAT have to be managed separately to avoid substantial VAT assessments, penalties and interest payments. It is a risky business to monitor only the balance between output VAT and input VAT. Neutrality can only be achieved – better is the word ‘earned’ – if certain formal and material requirements are met.

From tax strategy to artificial intelligence to automating the tax adviser

1. Final

'Innovation' and 'Tax strategy' have my interest. In the UK the Executive has to sign off the company's tax strategy and publish. The strength of the UK approach is that the Executive has to take position and also has to keep its promise as a public statement is made.