Introduction It’s an exciting period for everyone who follows VAT news. Various countries are implementing a VAT system, others are introducing carbon taxes, while recently the e-commerce legislation in the EU went into force. All extremely interesting topics, but the most exciting of them all is the surge of real-time reporting! Multiple countries all over the world are currently in the process of implementing some variant of this tool to tackle VAT fraud.

Introduction In this week’s blog post, we had the pleasure to discuss VAT with Tiina Ruohola. Tiina is Senior Adviser Indirect Taxes at EK - Confederation of Finnish Industries and in that capacity also member of the VAT Expert Group. Learn everything about e-invoicing in Finland and what she believes is a correct balance regarding data sharing with the tax authority. She rightfully states that “all information required should always be reasonable and actually used, not just collected.

Introduction In May 2020 we published an article about how many invoices summitto’s real-time reporting system could handle. We showed that TX++ could already serve e.g. Italy (between 2 and 3 billion invoices per year)[1] and Spain (4.8 billion invoices per year).[2] At that moment in time our software could handle 700 transactions per second, which refers to a maximum of 22 billion invoices per year. It is important for reporting systems to be future-proof, and to be able to handle changes in legislation and a growth in invoice usage.

Introduction Real-time reporting is picking up pace in more and more countries in order to reduce VAT fraud and increase compliance. In our previous blog posts, we have highlighted many benefits of real-time reporting for businesses and tax authorities. This time, we want to take a different approach: we ask VAT experts. Through our VAT talks, we have collected an incredible amount of precious information on real-time reporting developments, ways of implementation, its benefits and its weaknesses.

Introduction “VAT fraud is a timing-issue” as VAT Prof. Dr. Redmar Wolf said in one of our previous blog posts. Therefore, it is essential to rapidly exchange VAT data between Member States. Several obligations, systems and institutions were put into place to realise this rapid exchange of data. The wide variety of tools resulted, as often happens in the VAT world, in many abbreviations. In the following we will try to provide some clarity regarding: the VAT Information Exchange System (VIES), Intrastat, Eurofisc and the Transaction Network Analysis (TNA).

Introduction Data minimisation and the usage of metadata are being actively investigated by countries all over the world in relation to real-time reporting. The reason for their interest in such solutions lies in the need for more secure systems which may be more resilient regarding data leaks due to cyber attacks, human errors or even snoopy public officials. Although these systems may indeed require less data in order to perform the required tasks, they are not completely secure nor increase collection beyond what is possible with confidential systems.

Introduction In this episode of VAT Talks we discuss VAT with Raul Zambrano (Director of Technical Assistance and Technology of the Inter-American Center of Tax Administrations at CIAT) and Vinicius Pimentel de Freitas (Tax Auditor of the State of Rio Grande do Sul (Brazil) and Coordinator of the Brazilian Electronic Invoice programs). Both are experts regarding the various implementations of e-invoicing/real-time reporting in Latin America. Raul and Vinicius first of all emphasise that e-invoicing systems in Latin America “require sending information directly to the tax administration”.

In many of our articles, we have analysed the potential of real-time reporting in tackling VAT fraud while producing benefits for businesses. Nevertheless, real-time reporting systems can be a valuable tool also in the fight against corporate income tax fraud. In this article, we will better explain how this is made possible and what are the benefits for tax authorities and businesses. What is real-time reporting Real-time reporting is an innovative solution to tackle fraud and increase country revenues.

In this episode of VAT Talks we meet with Andrea Parolini, member of the VAT Expert Group. Andrea has an enormous experience in the VAT world, being a professor at the Catholic University of Milan and legal and economic adviser to the Italian government between 2014 and 2016, when the Italian Sistema di Interscambio (SDI) was conceived. Join us to discover how real-time reporting was developed in Italy and learn about its results so far.

Confidentiality has a special place in our discussions with VAT experts. We are aware of the potential impact of ransomware attacks and data breaches on the economic activity of businesses and entire countries. This is why we developed a confidential real-time reporting solution. We have seen that tax administrations are starting to reduce the amount of data they collect. Nevertheless, this could get them into a very difficult situation as the less data collected the less useful the system becomes.