…where will you hide?
by 卡塔尔世界杯常规比赛时间
accounting professionals may be focused for now on tax season 2022. but right around the corner, a revolution in tax is coming, if the united states can get out of its own way.
ready or not, here it comes: digitized sales tax compliance. the compliance might happen immediately after a transaction or right in the middle of it with a tax agency in between the buyer and the seller.
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it isn’t happening in the u.s. yet, but at least three states are thinking about it, and in 83 other countries, it’s already a thing. in california, florida, and massachusetts, it may soon be a thing. the federal reserve and the business payments coalition have already launched a pilot program to standardize electronic invoicing systems.
digitized tax compliance is far more than the mere e-filing of invoices and tax returns. it’s the movement of paper compliance activities to the cloud, where tax authorities can not only see transactions but, in some countries, actually, get involved in them.
the potential opportunities for accountants, auditors, and tax practitioners are as yet unknown, but where there is change, there is opportunity.
also, danger.
e-invoicing
at one level, e-invoicing entails nothing more than submitting invoices to customers electronically. american companies have mastered the requisite technology rather well.
in more sophisticated jurisdictions, such as mexico, iceland, argentina, saudi arabia and india, tax authorities have modernized their it infrastructure to the point where mandatory e-invoicing is helping to close the “vat gap,” the difference between what sellers should be reporting as value-added tax and what they actually cough up.
e-invoicing allows authorities to mine transaction data to see what’s happening and determine who’s complying well and who could be doing a little better.
in brazil, 90 percent of audits are sparked by data mismatches, many of which would have been impossible, or at least onerous, without digitized sales data.
real-time reporting
in real-time reporting (rtr) there is an exchange or exposure of data to tax authorities either has a transaction happens or shortly thereafter. in some countries, such as brazil and mexico, a transaction cannot be completed until the tax authorities approve it.
it’s been working just fine in mexico, where tax returns, accounting records, and other tax disclosures must be filed in standard electronic format. the cost of tax collection was reduced by 57 percent between 2006 and 2018 while revenue generated by audits rose an astonishing 117 percent between 2015 and 2020.
saf-t
saf-t—standard audit file for tax—is an electronic schema that enables an efficient exchange of information between businesses and tax authorities. poland leads the world in saf-t tech. france, portugal, and romania have compulsory saf-t requirements. austria and norway impose requirements prior to an audit.
ai
add a little artificial intelligence to e-invoicing, real-time reporting, and the saf-t regime, and authorities will be able to detect links between sales tax, corporate profits, and even individual incomes. imagine—concurrent compliance, detection of noncompliance, auditing, and enforcement.
given enough data and just a modicum of smarts, ai could analyze transactions and taxes to detect shifts in revenue sources, maybe even the causes of the shifts, maybe even solutions to rebalance revenue streams after the shifts.
digitized tax filing and real-time reporting will make non-compliance more difficult, but will it make compliance easier? as with all new technology and new regulation, changes begin with challenges, and cpa firms may soon be called upon to help clients meet those challenges and ride that wave of change.