the evolving tax landscape - sovos
TRANSCRIPT
Preparing your processes for modern tax compliance
The Evolving Tax Landscape
Filippa Jörnstedt & Christophe BourdaireRegulatory Analysis
Clearance
Post Audit
Transaction-Level Reporting
Electronic Filing
Sales & Use Tax
VAT
Excise Tax
E-Invoicing
Tax Reporting
Tax Determination
Tax Information Reporting
GSTeArchiving
Digital Business Transformation1
Business Physical and Financial Supply Chains
LARGE SUPPLIERS
SMALL SUPPLIERS
LARGE CUSTOMERS
SMALL CUSTOMERS
AP AR
X
SUPPLIER BUYER
The dream of native ‘off the shelf’ ERP to ERP integration is very, very far off.
LARGE SUPPLIERS
SMALL SUPPLIERS
LARGE CUSTOMERS
SMALL CUSTOMERS
AP AR
EDI
SUPPLY CHAIN MANAGEMENT
STRATEGIC SOURCING
P2P
SCAN/OCR
PURE-PLAY E-INVOICING
T&E AUTOMATION
EAI (INTRA-GROUP)
O2C
CCM
MPS
E-COMMERCE
EIPP
AR E-INVOICING
• Real-time• Frictionless• Interconnected
• Intelligent• Secure• Borderless
Business Processes on Steroids…
Mind the Gap2
Government Physical and Financial Supply Chains
½ Trillion EUR Global VAT Gap
• Real-time• Frictionless• Interconnected
• Intelligent• Secure • Local
eGovernment on steroids…
The Other Digital Transformation3
TRANSACTIONS
Correct tax rate compliant invoice record keeping
No impact on transaction validity
Initiated by tax administration
PERIODIC REPORTS AUDITSREAL-TIME MONTHS YEARS
The Traditional Compliance Cadence
• Audits remainretroactive
• Difficult to equatepaper-based and
electronic evidence
Continuous, authenticated data as transactions happen… Your accounts in the Cloud, courtesy of the tax administration
Continuous Transaction Controls – basics
…Imperfectionsimmediately impact your
business performance
A “3rd trading partner” determines your standards
and processes…
TaxAdministration
Supplier Buyer
Same Destination, Different Journeys4
Web Forms
Mexico, Brazil, Italy, Turkey, Korea
Paradigm ShiftDigital Tax Reporting
TraditionalTax Form Filing
Paper Forms
© 2017 Sovos Compliance, LLC.
Impact on Systems
Impa
ct o
n Bu
sines
s Pro
cess
es
TransformativeE-Invoicing Compliance
Digital file transmission required Electronic invoice requiredChile
Finan
cial
Oper
atio
nal
Tax Process and Resource Impact Digital Ecosystem Impact
Optional ‘Post Audit’ E-invoicing
Residual (Digital) Reporting
Poland SAF-T
‘Clearance’ e-invoicing and E-Assessment
UK MTD
Hungary
Spain SII
ERP Impact
Continuous Transaction Controls
Supplier onboarding, order management, catalogue, spendmanagement, interop
Paper B2B
Paper/PDF B2C receipts
Scan OCR
Pay
Dynamic dis-
countingetc.
Book
Map
Errormgmnt
Post Audit EDI
Structured mandatory XML schema
Intra-group
E-Receipts/tickets
Global XML
AP automationPDF PA B2B
T&E
Middleware
EDI/IB
EIN/P2P/Supplier portal
Clearance, B2B2G
Order, GRN/Delivery Note
SUPPLIER(S) BUYER
Diverse AP/AR systems & processes
REGULATORY CHANGE ACCELERATES
Support digital transformation
Pressure to use disparate local
solutions
Reverse digital transformation
Adopt a modern, global strategy
Your strategies Tax Developments
GAP ANALYSIS
e-Invoicing
Tax DeterminationReporting
The IPT Journey5
© 2018 Sovos Compliance, LLC
Indirect Tax Compliance Landscape Evolution
IPT Reporting by type of filing in the EU/EEA (October 2019)
48%52%
Paper Filing
eFiling
12 EU/EEA Territories have yet to implement eFiling
obligations for IPT
13 EU/EEA Territories have already implemented eFilingobligations for IPT
• VAT already on a journey to real-time reporting in Europe
• Lack of guidance from local authorities
• Mergers & Acquisitions
Within Europe
• Global programs mean global invoices… so far
• In some jurisdictions VAT applies to (re)insurance premiums
Outside Europe
• Coinsurance• Insurance
intermediaries• Parafiscal charges
Within the industry
Some challenges ahead for EU/EEA insurers
1 2 3Experience is key eAccounting is
already there Innovation is on
its way
• Insurance can benefit from the experience gained by other industries
• Insurance companies have already embraced the evolution towards eAccounting and eInvoicing
• Insurtech industry is already helping modernising the insurance world
Reasons to be optimistic
Thank you.