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When technology is legally required for VAT compliance

Technology has made global VAT compliance significantly simpler and more cost-effective. However, there is an additional, more urgent, reason for companies to adopt a tech approach to VAT compliance. Increasingly, global tax offices require businesses to file their VAT returns electronically, according to specific requirements. 

The technology-reporting VAT trend

Tax offices are moving towards technology-driven reporting. 

Companies with a VAT obligation will need the appropriate software to ensure VAT returns can be  submitted according to the specifications of each tax office. 

Moreover, compliance isn’t merely about submitting all the relevant VAT returns and statutory reports. Businesses are required to submit these in the specified format, through the specified electronic channels, or they will be considered non-compliant by authorities. 

Compliance failures – even when caused by outdated tech – can result in significant penalties.  

The move to e-filing

The trend towards e-filing requirements is clear. 

In Europe, Italy introduced mandatory electronic filing on all relevant B2B transactions on 1  January 2019. According to the Italian regulations, all relevant invoices need to be submitted in the required format through Italy’s Sdl system

The electronic requirement reduces fraud and minimises human error. From a  business perspective, however, the salient point is  that if you fail to submit in the proper electronic format, you will be considered noncompliant. 

France is following suit, with mandatory B2B e-invoicing on the cards in coming years. Greece is introducing mandatory e-invoicing and e-books.

Outside of Europe, countries from Australia to Saudi Arabia to Vietnam are planning to introduce e-invoicing and e-filing within the next two years. India has already introduced mandatory e-invoicing for a number of companies.

It stands to reasons that many more will follow suit – and that, ultimately, obligatory digital filing will become the global norm.

A technology-driven solution for a digital future

Vatglobal is a technology-driven company. Our proprietary digital VAT solution makes global VAT compliance simpler, faster and more efficient.

However, VAT compliance technology is no longer merely nice-to-have. As global tax authorities move towards technology-based monitoring and compliance, Vatglobal’s digital tools therefore become indispensable. 

Vatglobal’s cloud-based technology integrates with your existing platforms, which makes it easy to seamlessly comply with all digital requirements, in every jurisdiction in which you have an obligation. 

 

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