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.