Global e-invoicing mandates – what’s being overlooked?
That’s right: VAT.
New live digital reporting & e-invoicing regimes are surfacing three almighty tax and cash flow risks for businesses. These go beyond the simple challenge of post structured e-invoices between accounting systems and tax authorities. Whilst that has been the focus to date, and meeting launch deadlines, it overlooks that the government aren’t doing this to be helpful and improve companies’ efficiencies. They want to forensically audit the VAT and validate your liabilities and errors in real-time, which creates the risks. For example, the Polish VAT return is being overhauled to enable instant validation to July 2024 e-invoicing.
We term these tax risks ‘The 3 Horsemen of the VAT e-invoicing Apocalypse’.
This blog describes them and the business dangers. Plus, how VATCalc’s single application tackles them with fully reconciled calculations, auditing against local tax laws and submissions of: VAT invoices; e-invoices; and VAT returns.
VATCalc’s single application covers: 135 countries for VAT determination (Nov 2023); and 50 for e-invoicing & VAT returns (Jan 2024). So your calculations, e-invoicing and returns consolidated on one app from one provider. Imagine that!
3 Horsemen of the VAT e-Invoicing Apocalypse
| How VATCalc tackles the 3 VAT e-invoicing challenge | |
| 1. Inaccurate VAT calculations on sales invoices | VAT Calculator |
| Accounting/ERP systems may cope with basic domestic and cross-border sales invoice VAT calculations. But lack functionality and international tax rule content for anything more complex. In the real-time world the old, manual finance or AR interventions prior to issuance are no longer available This equals new hazards of over/underpaid and declared sales VAT and cash flow troubles. Plus, upset customers. Or worse, government e-invoice pre-clearance validations blocking your e-invoices going to customers. | Our global tax engine will accurately determine the VAT/GST for over 130 countries for your sales invoices. So before your e-invoices are submitted to the authorities, you can ensure you have full VAT legislative basis and citations on invoice calculations. |
| 2. Unable to challenge purchase e-invoice VAT errors | VAT Auditor |
| Suppliers face the same above challenges on their sales e-invoices. And you must now accept these live, including their VAT errors. This puts huge strains on finance and AP teams to identify within a day or two (rather than current weeks), and query with suppliers. Failure to do so means you will be over/under deducting input VAT in your VAT returns. Again, more cashflow, supplier disputes and audit headaches. | Our audit product validates VAT charged on your purchase e-invoices, with detailed legislative references on potential errors or missing data. Even if your data is light on details, quick and easy mapping and logic building can enrich the transaction and even audit just to tax codes. This can be done in milli-seconds, enabling finance or AP to instantly identify material errors to be challenged and get immediate corrections. |
| 3. VAT returns don’t reconcile to e-invoices | VAT e-invoicing & VAT Filer |
| This is where the above problems come to a head. Differences in yours, customers and suppliers live reporting come to head. Your VAT returns will not reconcile to the government’s e-invoice / digital reporting data. This triggers distracting and expensive queries and potentially VAT fines. | Our VAT invoicing product can now send or receive e-invoices into our app via a single connector. With our partner, we now cover 43 e-invoice jurisdictions (Europe, Asia etc) as well Peppol and US APM networks. |
| With our VAT Filer, sales and purchases e-invoices from the above are instantly posted to the right boxes in the right returns. And, where permitted, may be e-filed directly. This includes ESL’s; SAF-T; Controls Statements; etc. Meaning there is now need to worry about differences emerging between your submitted e-invoices and regular VAT returns and related submissions. | |
The outcome? There is now no need to worry about differences emerging between your submitted e-invoices and regular VAT returns & related submissions.
Contact us to learn more and see our app at work.
