The backbone of e-invoicing: the EU derogation to the VAT directive

Introduction France, Italy, Poland. What do these countries have in common? First of all, they are all members of the EU. And second, among many other similarities, they all requested and obtained a derogation to articles 218 and 232 of the 2006 EU VAT directive in order to be able to implement mandatory e-invoicing. In this blogpost, we want to discuss how the EU derogation system works and why it is so important.

VAT Talks - Aiki Kuldkepp

Introduction Real-time reporting and digital reporting requirements are advancing all over Europe. We discuss these developments with international indirect tax specialist Aiki Kuldkepp. Aiki has an astonishing career in the world of taxation and currently holds the position of senior manager at Grant Thornton. Come join us in a discussion about the future of VAT in Europe and how technology can help. Aiki is convinced that the “modernisation of reporting systems will help to increase the trust between member states” but she’s also aware of the difficulty of harmonising national DDRs in the EU.

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.

Is e-invoicing harmonisation in the EU possible?

Introduction Recently the European Parliament called on the Commission “to stand for the expansion of e-invoicing and calls for the introduction of an EU e-invoicing standard [sic] harmonising”.[1] This idea seems to be supported by many EU Member States and also private organisations. But what does this need for harmonisation mean exactly? Isn’t there already the pan-European e-invoicing standard EN 16931? In the following we will try to answer these questions.

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.