TaxTech – Jan 07th, 2020
European Union – Quick fixes go live
As of 1 January 2020, the EU Member States were supposed to implement the so-called “Quick fixes” into their national VAT legislation. As a reminder: the four Quick fixes are supposed to assist the EU Member States with reducing VAT fraud, focusing on cross-border supplies and chain transactions.
The Quick fixes include requirements for businesses always to have the valid VAT ID number of their customer to apply the zero VAT rate and to specifically allocate the intra-Community supply in chain transactions to the first transaction of the supply chain. Furthermore, businesses will have to keep (more) specific evidence on the transportation of their goods. There’s also a simplification for call-off stock available.
Although some of these rules are really not completely new, there has been some unclarity on a few of the conditions and they were not always being applied the same in every Member State. The Quick fixes, however further clarify and aim to harmonize these rules throughout the EU.
Nonetheless, some EU Member States still haven’t implemented the Quick fixes completely in their local legislation. In some cases, it is also still not 100% clear how businesses must deal with the new requirements. For example, how often must a business check the validity of the VAT ID number of his customer: every transaction, or is a ‘periodical’ check also sufficient?
The website of the UK HMRC is an example of how quick fixes have been implemented, and it provides more details on how businesses should deal with the changes. See the website HERE.
A broader overview of the status of the implementation of the Quick fixes by the different Member States (including links to the country-specific websites) can be found HERE.
European Union – ECONFIN report on the future of VAT
Linked to the Quick fixes is the proposed ‘definitive VAT system’. Based on this proposal, as of 1 July 2022, the current VAT system in the EU should change from a ‘country of origin’ to a ‘country of destination’ principle. In short, this would mean that the main rule would be that transactions will become subject to VAT in the country of (final) consumption, instead of in the country where the goods are shipped from.
On 9 December 2019, the Council of the European Union published the ECOFIN Report on recent tax issues, in which also the proposed definitive VAT system is discussed, but the report includes more, such as developments relating to VAT rates, E-commerce, and Energy Taxation.
The report shows that there does not seem to be a consensus amongst the Member States yet to implement the Definitive VAT regime as proposed by the European Commission although the principle of ‘’taxation in the Member State of destination’’ is accepted
The full report can be found HERE.
European Union – E-commerce and VAT after 2021
The rules for VAT on E-commerce will change as of 1 January 2021. From this date, online platforms will become responsible for ensuring that VAT is collected on sales of goods by non-EU companies to EU consumers taking place on their platforms of trading.
The online platforms, who are often not directly involved in the sales via their platforms, will, in fact, be deemed to have purchased the goods from the suppliers (B2B supplies) and subsequently supplied the goods to customers (B2C supplies). A big change compared to the current situation.
An overview of the new rules can be found HERE.
KPMG – Indirect tax explained to 8-year old
A common joke in VAT is that for many people, the letters VAT do not stand for Value Added Tax, but Very Annoying Tax and it can indeed become very complicated. The VAT rules are not always easy to understand.
It is also interesting to see how you can best explain ‘VAT’ to people who are not familiar with tax. KPMG International’s Global Head of Indirect Tax, Lachlan Wolfers, challenged himself to explain Indirect Tax to an eight-year-old — his son, Henry. The best part of the video is where the boy says that tax is boring…
The movie can be found HERE.
VAT is everywhere
VAT & GST (“VAT”) are more than just a simple “in” and “out”. CFO’s are becoming more and more aware of the significant impact that VAT & GST has on their business and financial transactions. Normally seen a simply throughput, VAT can significantly impact cash flow, tax risk and even the bottom-line results. VAT, VAT reporting and VAT technology solutions have become a strategic focus of many enterprises.
Remco Dewaerheijt, VP Tax & Product Strategy for VATBox, met with different industry tax experts and encourages them to share their personal views, experiences and their thoughts on the future of VAT & GST.
In VATBox’s ”Industry Leaders Reveal” series, you can learn more about the different views shared.
Click HERE to read the full article and enjoy one minute’s sound bite.
Transforming your teams and setting sail for 2025
People — not just Millennials — more than ever want to work for organisations whose missions resonate with them intellectually and emotionally.
Over the past decade, “purpose” has become a management watchword. Since 2010 it has appeared in the titles of more than 400 new business and leadership books and thousands of articles. And no wonder: many people—not just Millennials—want to work for organisations whose missions and business philosophies resonate with them intellectually and emotionally.
Click HERE to listen to the full HBR podcast and learn great tips to implement across your tax organisation.
What is the Digital Operations Strategy for your tax department?
Digital Operations is a new type of company operations. One that learns from the consumer technology products we love and use every day. It understands that employees are customers. It knows that to get the best technology, it must look past traditional IT.
In the past, consumer-tech took the lead from the business. Times have changed. Products developed for consumers now have a lot to teach companies of all sizes about how to do it right.
In this clip, Forrester’s VP, Principal Analyst Liz Herbert discusses recent and upcoming research that covers how to build a leading DOP strategy. These next-generation digital operations platforms (DOPs) — spanning finance, customer operations, supply chain, product, and people/talent — play a critical role in powering modern business and delivering customer experience.
Click HERE to view the full Video
See you in two weeks!
VATBox Tax Knowledge team