Today, in Europe and globally, transaction tax reporting and compliance is all about getting the transactional data and right from the outset. From the moment a transaction is planned, executed through completion to archiving, a business must have a keen awareness of tax implications and a focus on tax accuracy.
As we touched on in our recent blog ‘Introduction to e-invoicing: streamlining business transactions’ there is a rapid emergence of e-invoicing mandates across Europe, Asia-Pacific and the Middle East. The trend includes the expansion of real and near-real-time compliance requirements for tax reporting on global transactions.
Businesses need accurate tax determination, invoice production and digital reporting in real-time or near real-time. Post transaction, digital archiving, analytics and reporting transparency are needed to provide effective audit and also the ability to review and protect the business’s tax position.
CTC for tax compliance
Continuous Transaction Controls (CTC) are processes that enable tax authorities' access to financial transaction data in real time, with the goal to increase reporting accuracy, transparency and reduce tax evasion. Using CTC approaches allow tax authorities to monitor continuous compliance on global transactions more effectively and efficiently in relation to the summarised transactions reported by taxpayers in prior years.
A crucial component of CTC is e-invoicing, which aids tax authorities by providing more granular data than ever before, speeding up discrepancy detection and resolution, and assisting in reducing tax evasion. The requirement may seem to be time-consuming but, when done right, for businesses CTC will usually mean that the transaction tax continuous compliance process is automated with reduced needs for human intervention and delivering increased process efficiencies. This significantly reduces the need for manual efforts as it relates to enabling reporting, eliminates paperwork and ultimately transactional errors. This delivers efficiency, cost savings and an improvement in the business’s tax risk position.
Real-time reporting that is reliant on electronic invoicing is geared to provide up-to-date, accurate information so the possibilities for business insights via deployment of data analytics are greatly increased. Business leaders can leverage such insights to spot issues and consider transaction trends in the context of informing and strengthening the wider business strategy.
Key features of CTC:
- Real-time reporting for the most up-to-date information
- E-invoicing to reduce tax fraud and transaction errors
- Automated data matching to help identify transaction discrepancies and potential tax evasion
- Data analytics to help tax authorities and businesses identify patterns, trends and anomalies
- Digital signature and authentication to ensure document integrity
Working with Vertex, your approach streamlines and simplifies the intricacies of real time, near real-time and periodic tax reporting and management for global transactions.
The specific details and implementation of Continuous Transaction Controls vary from country to country, but Vertex can help simplify tax compliance and streamline CTC requirements across countries we support.
Our approach means that tax content is consistently updated to comply with the ever-shifting landscape of tax regulations and requirements across various jurisdictions.
Invoice tracking and monitoring is also improved through comprehensive role-based dashboards. These are tailored for both Accounts Payable and Accounts Receivable, ensuring a holistic view of invoice data across multiple countries. Compliant document and data exchange is facilitated, which results in seamlessly automated electronic business-to-business (B2B) and business-to-government (B2G) collaboration and data exchange.
This emphasis on improved data quality and access, coupled with increased efficiency within the invoicing lifecycle, enhances overall productivity and delivers real-time insights to a wider group of business functions beyond the tax team, to finance and IT. It means empowering data driven decision-making and delivering the potential for our clients to create a valuable, strategic competitive edge.
Key benefits delivered for continuous compliance:
- CTC compliance due to content being continually updated as regulations and requirements change across jurisdictions
- Simplified processes thanks to a single cloud platform
- Compliant document and data exchange for electronic B2B and B2G e-invoicing
- Improved data access for real-time data for tax, finance and IT functions
- Increased invoicing lifecycle efficiency
- Real-time reporting for data driven decision-making
- Improved invoice tracking and monitoring for a comprehensive view of data via role-based dashboards for Accounts Payable and Accounts Receivable
- Audit-ready, secure and accessible data retention for e-invoices and related artefacts
Is your business compliance-ready?
How ready are your existing processes and technology when it comes to CTC and tax reporting for global transactions? Maybe you know your business has obvious gaps and areas that require improvement?
It’s important to be knowledgeable of the current state of e-invoicing, data management, analytics and reporting capabilities within your organisation. Working with finance, IT and legal to understand the impact of CTC on the organisation is a crucial first step. Continuous compliance for tax teams, on the other hand, is an ongoing process that requires regularly reviewing and adjusting as regulations change.
With Vertex solutions, customers automatically meet the mandated real-time reporting, data exchange and security standards as they evolve.
Please remember that Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.