Recently we published our very first publicly accessible real-time reporting pilot and now it’s time to present our first updated version of this tool. From today onwards, our pilot also supports EU intra-Community transactions!

In the following we will explain why this is such a relevant addition to our pilot, diving deeper into the latest VAT developments in the EU. However, if you already know why this is the case and you just want to try it out, go directly to: https://portal.summitto.com/

Real-time reporting for intra-Community transactions

As we have discussed many times on our blog, for example here, real-time reporting is high on the political agenda of many EU Member States. Whereas e.g. Hungary and Italy were one of the first countries to implement this tool, currently more and more Member States are considering the introduction of real-time reporting. The latest countries to announce that they will implement real-time reporting were France, Poland and Slovakia. Furthermore, also in Germany real-time reporting made it to the political discussion. Therefore, it seems safe to say (taking into account the previous successes of similar systems in other parts of the world) that it’s only a matter of time before the majority of Member States have implemented a real-time reporting system.

It is as if these Member States listened to Paolo Gentiloni, Commissioner for Economy, who stated in July 2020 that “we need to do more to step up the fight against VAT fraud”. The above mentioned developments are indeed great in terms of the fight against fraud, but one of the downsides is that many Member States are implementing real-time reporting in a different way which distorts the EU Single Market. In order to harmonise the VAT reporting requirement of Member States, the EC aims to present a legislative proposal in 2022/2023 which will try to “streamline the mechanisms that can be applied for domestic transactions” and to “ensure a quicker possibly real-time, and more detailed exchange of information on VAT intra EU transactions.”[1] The latter is especially relevant because a real-time reporting solution for intra-Community transactions would allow companies that are already required to report their invoices for domestic transactions to fully integrate both requirements within one single IT solution. This could significantly decrease the administrative burden for businesses that now have to report information to (1) the local tax authority and (2) to the VAT Information Exchange System (VIES).

Summitto’s public pilot and intra-Community transactions

By allowing pilot users to report intra-Community transactions, we hope to show that the benefits of modern technologies are not only confined to real-time reporting for domestic transactions, but that it can also help to implement a secure real-time reporting system for intra-Community transactions.

Furthermore, the implementation of real-time reporting for intra-Community transactions in a confidential way can even help to further strengthen the cooperation in the fight against VAT fraud between Member States. Namely, tax authorities will be able to share only essential (aggregated) information without having to share all granular confidential information.[2] This has the potential to greatly facilitate targeted cooperation between Member States, which, according to many experts, is essential to step up the fight against VAT fraud.

This pilot only highlights a simplified way to register intra-community transactions. In order to actually foster cross-border cooperation and data-exchange between Member States, as well as allowing third parties to effectively make use of these registrations, more tools will need to be built.

In case you want to learn more about how summitto’s real-time reporting system exactly works and how it benefits both the public and private sector click here. For questions, shoot us a message at info@summitto.com

[1] https://ec.europa.eu/taxation_customs/sites/taxation/files/2020_tax_package_tax_action_plan_en.pdf

[2] Read more about how summitto’s real-time reporting system is able to https://blog.summitto.com/posts/invoice_fingerprints/