DATA management

Increasingly, tax administrations make intensive use of technology for the managing of taxes and, as far as VAT is concerned, new regulations thrive relating to the use of technology which aim is that local tax authorities may dispose of updated databases of those relevant transactional data required for the automated reporting and auditing of the tax

An example at an European level of what has been said, are the movements producing at the European level so to create a framework of EU standards that homogenize the domestic regulations of the technology involved in the automation of VAT reporting. 

Given its implications, a special reference must be made to the changes foreseen in the, so called, pillar one of the legislative proposal “VAT in the digital age”(ViDA) which, is expected, will have to be implemented by 1 January 2030.

Such changes, affecting the VAT Directive, will oblige EU member states to introduce digital reporting obligations, to both suppliers and customers, and obligatory e-invoicing as regards non-domestic B2B transactions, namely:

•  Intra-community supplies, acquisitions and B2B services.
•  Reverse charge when the supplier is non-established.
•  Supplies of energy to a taxable dealer.+
• Triangulations.

Once the changes are introduced, the Vida contemplates that pre-existing domestic regulations introduced by member states on these areas must be harmonized to the new EU standards by 1st January 2035.

It is a critical issue for internal IT, financial and tax departments of multinational companies and their professional VAT advisors, to identify which are those solutions which allow them to have the transactional data ready on demand so to be able to comply with the required e-invoicing and e-reporting standards in the different countries they operate.