![]() This grew from the 2020 EU Tax Action Plan proposals for a fairer and more efficient EU tax regime. ![]() Thus simplifying the VAT compliance process for both the taxpayer and tax authorities.Īs part of the EU VAT in the Digital Age reforms currently in publica consultation, there is a channel for a harmonised Digital Reporting Requirements (DRR) which includes a Continuous Transaction Control (CTC) evaluation. Data from such centralised systems are now being used to prepare pre-filled draft VAT returns which taxpayers can then review, adjust and approve.But many countries have already launched their own systems which will present challenges for interoperability. The European Commission is pursuing some harmonisation (see below) following on from its work on the core invoice standarisation. The standardisation of these platforms has been variable.This can also include cross-checking of sellers and purchasers invoices and book-keeping. Many countries are becoming increasing sophisticated at enabling customer to review, reject or approve the invoices online in full invoice exchange platforms. Increasingly, the country platforms will also transmit the validated invoice to the customer of the invoice issuer, and only at this point will the invoice be considered legally issued from a VAT perspective.Most tax authorities impose basic invoice validation checks, in real time, and will return a approve, errors or reject message to the issuer.Typically, in real-time or within a few days of the creation of the invoice.Manual invoice-by-invoice creation in portal or.Automatically via API or similar from invoice issuer’s ERP, accounting, invoice, e-commerce platform, point-of-sale or similar system.Invoice data is transmitted to the authorities interface or portal:. ![]() As invoice transaction listing in XML or similar format (e.g.Secure electronic or e-invoices format (e.g.Reporting of invoices to the tax authorities:. ![]() No acceptance or regulation of invoice by tax authoritiesĬommon features of Continuous Transaction Controls (CTC) Invoice listing submitted immediately after invoice issued Post-clearance - clearance short time after exchangeĭocument types not regulated and therefore inconsistent and may resort to email and similarĬertified e-invoice agent (PAC) submitts inoices Pre-clearance variation - clearance before invoice exchange Govt platform accepts invoices, validates, and buyer acknowledges invoice Platform responsible for invoice forwarding to customerĬustomer or receiver may review and reject invoice This means our customers remain agile to report their transactional data in any CTR format around the world. The EU is evaluating its own version of Digital Reporting Requirements, but faces challenges with a proliferation of standards already.Īt VAT Calc, we are passionate about getting the most complex VAT or GST calculation right without expensive or lengthy implementations and heavy support. The trend started in South America, with pioneers such as Chile and Mexico, and now is spread to Europe and Asia. And most countries now impose validation checks and cross-checking to customer records (in real-time) before invoices are issued – meaning the issuer has surrendered CTC is offering opportunities to simplify compliance further along the reporting chain, including removal of VAT return obligations. It comes in a number of forms, including e-invoices or transaction list reporting. Real-time transaction-based reporting and pre-clearance of VAT invoices to tax authorities to improve tax collections and simplify compliance Governments seize control of invoicing processĪs governments around the world look to close the VAT Gap – missed VAT or GST tax collections – many are turning to mandated live invoice reporting and validation.This is commonly termed Continuous Transaction Controls (CTC) or transaction-based reporting.
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