VAT & B2G Reporting Newsletter: April 2018

International News

European Council Clears Way for Italy e-Invoicing Requirement

On April 16, 2018, the European Council approved Italy's derogation request from Articles 218 and 232 of the EU VAT Directive, bringing Italy one step closer to implementing its mandatory e-Invoicing requirement. Article 218 requires that Member States accept invoices in paper or electronic form. Article 232 provides that electronic invoice can only be used upon the consent of the recipient. Pursuant to the derogation, Italy is authorized to require vendors use and customers accept electronic invoices.
 

Italy believes that their e-invoicing requirement will allow them to more effectively combat fraud and evasion, boost efforts at digitalisation of their economy and simplify tax collection. The derogation shall apply from July 1, 2018 until December 31, 2021. The Italian e-invoicing requirement is slated to go into effect over several stages starting in July 2018, with a substantial number of taxpayers being impacted in January 2019.

 

Country-by-Country News

Dominican Republic to Adopt e-Invoicing Mandate in 2019

The Director of the Dominican Tax Administration (DGII) announced that they will begin implementing an electronic invoicing (e-Invoicing) mandate, with a pilot study kicking off in January 2019. E-invoicing requirements vary from country to country and much of the relevant details on the Dominican approach are yet to be learned. We expect additional details to be released (including the relevant regulations, requirements, and technical schema) over the coming months. Today, the Dominican Republic uses fiscal printer technology as a means of ensuring retail transactions are reported to the Government and tax is properly collected. However, tax avoidance and evasion continue to be a concern and the move to a more comprehensive real-time (or near real-time) reporting requirement is not unexpected. Rather, it’s indicative of a clear global trend that was first spotted in South America but is now spreading globally. Governments are hungry for the data that allows them to ensure every penny of tax due is collected, remitted, and reported – and they are not willing to wait.
 

For further details, click here.

 

UK-EU Draft Withdrawal Agreement Published

On March 19th, the UK published a first draft of a withdrawal agreement, which although not finalized, indicates that for value-added and excise taxes, much of the status-quo with the European Union (EU) will remain until January 1, 2021.
 

Notably, the Draft Agreement states that the UK and the EU will agree to have the EU Directive on VAT (Council Directive 2006/112/EC) remain as the controlling doctrine for matters related to VAT, when goods are transported between the UK and the EU. This agreement would remain in effect during the transitional period, which would extend until December 31, 2020. Other provisions of the Draft Agreement address excise taxes, citizens' rights and customs procedures. The Draft Agreement has been published by the UK government here.  

 

UK Finance Act 2018 Finalized

On March 15, 2018, Finance Act 2018 was granted Royal Assent by the UK Parliament. The Act makes several changes to direct and indirect taxation in the UK, including new requirements for online marketplaces to display their VAT registration number on the marketplace and, further, an extension of joint and several liability to these types of marketplace sellers for purposes of VAT.
 

All of the changes made under the Finance 2018 Act can be seen here.

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