How companies can optimally benefit from real-time reporting according to the experts

Introduction In the last couple of years we had the honour to speak to many top-tier VAT experts from all over the world in our series VAT Talks. The knowledge they shared is invaluable for any VAT professional. Therefore, after an episode about confidentiality and the advantages of real-time reporting, in the following we will share the experts’ view on how companies can optimally benefit from real-time reporting. Focus on digitalisation of VAT reporting and other business processes Many VAT experts emphasised that by implementing real-time reporting VAT compliance can be fully digitalised and even (to a certain extent) automated.

Insight special: China’s Golden Tax System

Introduction China’s share in the world economy and political influence has been steadily growing since Deng Xiaoping’s reforms at the end of the 70’s. The liberalisation of the Chinese economy required additional revenue for the state. As one of the tools, China introduced VAT in 1984. Ten years later, the Chinese government developed a nationwide value-added tax administration and monitoring system, better known as the Golden Tax System (GTS). The aim of this blogpost is to develop a better understanding of the Chinese GTS and to highlight the differences to European reporting systems and TX++.

Periodic reporting requirements around the EU

Introduction In a previous blog post we discussed several real-time reporting models for VAT. Now it’s time to discuss periodic reporting solutions and especially those implemented in the EU. Following our own research, 10 out of 27 EU Member States implemented such a solution at the moment of writing (See Table 1). In the following we will first explain what periodic reporting for VAT is, after which we explain the differences between periodic reporting and real-time reporting.

Insight special: real-time reporting in South Korea

Introduction After analysing real-time reporting systems in several countries around the world in our previous blog-posts, we wish to focus today on one of the first real-time reporting systems of Asia: the South Korean one. South Korea introduced a real-time reporting system as far back as 2011 and is one of the most advanced countries in this area in Asia. In order to better understand how the system works, we will first present an overview of the developments which led to the current system in the country.

Real-time reporting and the reverse charge mechanism

Introduction When discussing the modernisation of the EU VAT system, often reverse charge is mentioned as a solution to tackle VAT fraud and close the VAT gap. In the following we will provide an introduction to the reverse charge mechanism, explain why it is actually not the best tool to fight VAT fraud and discuss how reverse charge can co-exist with real-time reporting systems such as summitto’s solution. What is reverse charge?

Self-billing and real-time reporting

Introduction As we have shown in other articles on this blog, real-time reporting has a considerable impact on the economic processes within a jurisdiction. Through digitalisation, some of them might increase their efficiency, as is the case with call-of-stock arrangements. Nevertheless, real-time reporting could create some legal challenges when it comes to a particular way of issuing invoices. Today, we will focus on self-billing and how real-time reporting may have an impact on this type of arrangement.

Call-off stock arrangements and real-time reporting

Introduction Real-time reporting solutions are spreading all over the European Union (EU). With more and more countries planning to introduce this technology, we wish to focus today on how real-time reporting affects call-off stock arrangements, predetermined movements of goods between EU Member States. In order to quantify the advantage of real-time reporting in the context of call-off stock arrangements, we will first focus on the definition of such movements of goods, taking into account the latest developments on a EU level.

Centralised vs. decentralised clearance

Introduction Clearance is a central topic in the debate around real-time reporting. Some countries adopting this technology opted for a clearance model. We explained in a previous blogpost the meaning and functioning of clearance. Today we would like to dig deeper into the concept of clearance, highlighting the difference between centralised and decentralised clearance. In fact, clearance is not always the same. Some countries like Italy opted for a centralised clearance model, where all invoices have to be first approved by a central authority.

To clear, or not to clear, that is the question. Clearance: questions answered

Introduction There is a lot of fuss about clearance in the VAT world nowadays, but the problem seems to be that not everyone is following the same definition. The Italian VAT reporting system (SdI) is considered as a clearance model, but so is the Mexican system, and yet there are many differences. In this blog post we will try to explain what it actually is. What is clearance? Clearance is one of the design options when thinking of the implementation of a real-time reporting model.

Real-time reporting is coming to Germany: background and recommendations

Recently the winning parties of the German elections came to a coalition agreement. The SPD (social democrats), the Bündnis 90/Die Grünen (greens) and the FDP (liberals) prepared a 177-page document to present their plans for a “free, just and sustainable” Germany. And lucky for our readers they also talk about VAT! More specifically, they intend to implement real-time reporting: “We will introduce a uniform nationwide electronic reporting system as soon as possible, which will be used for the creation, checking and forwarding of invoices.