Key Theme Includes EU VAT Fraud: Eliminating the €160 Billion VAT Gap
Avalara EMEA, a leading provider of cloud-based transactional tax compliance automation for businesses of all sizes, held its second annual VAT Automation Summit, sponsored by Brewer Morris. The summit brings together leading indirect tax professionals to discuss topics affecting the industry, including EU VAT fraud and the future of tax compliance automation. A central theme of the summit is focused on the need for businesses to adopt tax automation solutions to combat fraud and ensure greater compliance. This topic is timely, due to recent news released by the European Commission regarding the ‘VAT Gap’, orthe staggering €160 billion in lost EU VAT revenues in 2014. .
“Moving to real-time tax reporting will help to increase transparency in the VAT system and can prepare businesses for tax authorities’ demands for more, live data,” said summit speaker Richard Asquith, vice president of Global Indirect Tax, Avalara EMEA. “VAT automation systems are a valuable solution for managing complex VAT processes, such as cross-border sales for businesses trading in countries with different regimes or regulatory requirements.”
In addition to the EU VAT Gap, the summit is addressing major developments shaping domestic and international trade, including the UK’s initiative to streamline the tax reporting process through its 2020 ‘Making Tax Digital’ initiative.Through this new system, HM Revenue & Customs aims to eliminate the tax return over the next five years. Instead, businesses will be required to track tax compliance digitally and update HMRC at least quarterly via a digital account. The goal of this proposal is to create a more efficient tax reporting process; with further regulatory change on the horizon, such as Brexit, its implementation is paramount.
Across the globe,countries such as China, India, Egypt and the Gulf Cooperation Council (GCC) states,are placing increased emphasis on VAT collections or introducing new regimes. These new systems lead to further changes in international VAT requirements, and thus further complexity.
New regulations and the need to mitigate fraud present a prime opportunity for tax automation services that help businesses to comply with country VAT rates and eliminate errors which are costing firms millions in tax penalties.
While VAT automation services offer a more immediate solution to address these recent trends, a longer term opportunity for accountants lies in blockchain technology. This public ledger system records and validates each and every transaction. Entries are registered and cryptographically sealed, making them nearly impossible to falsify or destroy.
“Blockchain technology has massive implications for tax professionals,” said Kid Misso, Senior Director of Solution Consulting, Avalara EMEA. “The fact that it is a validated agreement between two or more parties means it cannot be repudiated or invalidated.The indelibility, speed, and synchronization of this technology can lead to greater accuracy and transparency, helping to reduce the likelihood of fraud in the future.”
For more information on Avalara and video from the 2016 VAT Automation Summit, please visit www.vatlive.com.