Although split payment approaches and mechanisms differ by country, the general concept is similar. Rather than relaying the full payment to the seller, the credit card, debit card, or payment services company extracts the VAT from the transaction and submits it directly to the government agency, typically a treasury organization.
Given the digital nature of this approach, split payment mechanisms are also being seen as a way to enable the real-time reporting and monitoring activities that tax authorities appear eager to conduct.
Read more about how Latin American countries like Argentina, Ecuador, and others are currently managing VAT with a split payment method.
The European Union’s “VAT in the Digital Age” (ViDA) initiative is set to reshape the VAT compliance system across member states. At the core of this initiative is the transition to mandatory B2B electronic invoicing, alongside real-time reporting requirements.
For businesses, these changes bring both challenges and opportunities, requiring organizations to adapt their systems, processes, and strategies to remain compliant while also unlocking new efficiencies in their operations.
Get practical guidance on stabilising your France e-invoicing setup, preparing for future e-reporting and e-invoicing mandates.
Since France’s e-invoicing mandate was implemented, the focus for finance and IT teams has shifted from meeting the deadline to resolving operational issues and strengthening processes.
Join Gonçalo Ladeira Dias and Patricia Rocha Jordan for a 45-minute interactive clinic in which they’ll share lessons from the first live implementations, discuss common pitfalls and answer your questions about e-invoicing and e-reporting in France.