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Making Tax Digital for VAT

Making Tax Digital for VAT

Businesses across Europe are facing rapid advancement of digital tax reporting, wherever they operate. These changes are coming from the Organisation for Economic Co-operation and Development (OECD), the European Union’s DAC-6, and other country-specific digital tax reporting programmes like MTD for VAT in the UK.

Of course, the pandemic has also brought new regulatory challenges, such as the temporary changes to value-added tax (VAT) rates in the UK, Ireland, and Germany as well as the realisation that businesses need to harmonise data across all their systems if they are to remain compliant and operate effectively.

Latest EU figures show that the VAT gap was €140.04 billion. With such immense numbers, it is easy to see why tax authorities across Europe are cracking down and trying to make the tax process as digital as possible.

It is also worth noting that many national tax authorities are choosing their local equivalent to VAT to start their digitalisation journey, before moving on to other tax types and accounting treatments, meaning the design and implementation of digital reporting standards will often occur at the national level, resulting in numerous operational differences.

HMRC’s Making Tax Digital (MTD) initiative is fundamentally changing UK tax systems and processes for businesses. MTD provides a, digital service enabling businesses to get their tax right the first time, not only reducing tax lost, but also reducing the cost, uncertainty, and worry that businesses face when HMRC is forced to intervene to put things right.

Meeting the requirements for the second phase is far more complex and challenging for businesses, as it requires evidence of an uninterrupted digital journey of a transaction from source systems through to the VAT return.

The good news is that it’s not too late to get ready for MTD for VAT. HMRC has given more time. Choosing a solution that can help you meet the final April 2021 deadline, and everything else that is to come, will help secure the long-term future of your business while remaining on the right side of regulatory and compliance requirements. We have therefore prepared this paper to offer you a range of best practices you should consider in your preparation for MTD for VAT.

You will find out:

  • How prepared indirect tax professionals are for changes in the European tax landscape
  • Key requirements to making sure your company complies with MTD for VAT.
  • Best practices for developing a tax transformation strategy and selecting an MTD software solution
  • Considerations when looking at a tax technology platform and MTD for VAT
  • How to ensure tax compliance with the right indirect tax technology tool

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