Country and tax compliance | issue 1
Tungsten Network constantly strives to stay abreast of all the latest tax and country compliance developments around the world. We do this to stay one step ahead of new regulations, ensuring that our solutions adhere to the latest global standards as they occur. Here is the latest news for the past month:
France is considering introducing mandatory B2B e-invoicing. Like many other countries, it is taking actions to reduce its tax gap and recently the French minister of Action and Public Accounts announced aggressive measures to fight VAT fraud. The French government is now organising a ‘consultation’ with small and medium-sized businesses. While businesses are consulted for their views, it is becoming clear that the government’s intention is to introduce an e-invoicing mandate. Timelines and requirements will become clearer over the next months. Mandatory e-invoicing for suppliers to French government entities is being rolled out and will apply to all French companies by 1 January 2020.
Further, France has recently announced additional invoice content requirements, which will be mandatory for all invoices issued the in-country. These include distinguishing the billing address of the buyer and supplier if it is different from their office address, as well as including the purchase order number if the customer has already established it. The changes will come into effect by 1 October 2019. Tungsten Network is already capable of handling the requirements with company addresses labelled ‘Invoice from’ and ‘Invoice to’.
On May 16, 2019, the Polish legislator published draft amendments to the VAT act, aimed at introducing a mandatory split payment mechanism for selected goods and services in Poland.
The obligatory split payment applies only to transactions made between taxpayers (B2B), which are subject to VAT in Poland and of value exceeding 15 000 zł. There will be new invoice layout requirements introduced to mark an invoice as subject to the split payment method.
In general, the split payment mechanism will be obligatory for the following groups of goods and services:
• Steel products, precious metals and non-ferrous metals
• Waste, scrap and recyclable materials
• Electronics, specifically processors, smartphones, phones, tablets, net-books, laptops, game consoles, inks, toners and hard drives
• Fuels for cars, fuel and lubricating oils
• Greenhouse gas emission rights
• Building and construction services
• Sales of car and motorcycle parts
Tungsten is currently assessing the impact of the Polish split payment requirements on the Network.
Starting 1 June 2019, 9% VAT rate on the supply of high-quality food products had been reduced to 5%. Examples of these products are foodstuffs obtained from mountain areas, as well as organic and traditional products certified by Romania’s Ministry of Agriculture and Rural Development. With the exception of supplies to final customers, a copy of the recognition, attestation or certification document issued by the relevant authorities must accompany supply of these products.
We have made the new VAT rate available.
In addition to preparing our solutions to meet the requirements in our other updates, currently Tungsten is planning to update its system to include Spain’s Impuesto sobre la Renta de las Personas Fisicas (IRPF). These changes will cater to freelancers in the country. Exact dates are will be communicated as soon as these are known.
On 7 June 2019, Tungsten’s Head of Country Compliance was in Delhi to meet with the CEO of India’s Goods and Services Tax Network (GSTN) and discuss best practice and lessons learnt from e-invoicing mandates elsewhere in the world. This follows the announcement on 6 May 2019 that the Indian government have advanced their plans to move to a transaction clearance or real-time capture model for all domestic B2B invoices, in a bid to eliminate invoice fraud and reduce tax leakage in the country.
GSTN is on the committee of the GST Council that is looking into the overall feasibility and timelines and issues connected to e-invoicing, including impact on specific industries (banking, telecoms and FMCG). On 21 June, the GST council met, presided over by the new Minister of Finance, and decided to introduce an electronic invoicing system for B2B transactions. The introduction will be via a phased approach as already indicated in our May update. Phase 1 of the electronic invoicing is proposed to be voluntary and shall be rolled out as from January 2020. Tungsten will remain close to the GSTN to understand the details of the programme and its impact on the network and future developments.
Kingdom of Saudi Arabia
KSA has advanced plans for a ‘national VAT/TAX’ platform across all constituencies. It is not yet clear how these plans relate to the existing ESAL platform. Tungsten is monitoring the situation closely and working with large consulting organisations with the aim of complying with any new regulations.
United Arab Emirates
The UAE tax authority has published Decision No. 7 of 2019 on Tax Invoices and Credit Notes, which states that a taxable person is allowed to issue a single tax invoice or credit note relating to different supplies, if the single document clearly displays “Tax Invoice/Tax Credit Note”.
On top of that, there are advancing plans for a ‘national VAT/tax platform across all constituencies, including B2B, B2G and B2C. Once again, Tungsten is monitoring the situation closely and working with large consulting organisations with the aim of complying with any new regulations.
Rest of Asia
Tungsten is conducting partnership discussions with an international and local service providers and governments in China, Japan, Indonesia, Taiwan and Vietnam. We hope that through these discussions we will be able to offer a tax compliant e-invoicing solution in as many of these countries as possible.
Please refer to our May update for more information on legislation in Singapore, Taiwan and Vietnam.
Argentina, Brazil and Chile
While the government e-invoicing mandates in Latin America are helping governments to combat invoice fraud, they have not brought companies any efficiencies from invoice automation. To support our customers in achieving AP/AR cost savings and process improvements, Tungsten is collaborating with a global service provider to enhance and expand our solution in South America, starting in Brazil and Chile. This collaboration will ensure compliant processing, and the elimination of emailed, or even paper invoices into our customers’ AP environments.
Have you got questions on Compliance or Tungsten’s Roadmap? Get in contact with our Country and Tax Compliance team at [email protected]