The changing realities of global tax mandates on reporting

What you need to know

Data is king; it informs everything we do and is the main asset and enabler of digital transformation. And although it’s an acknowledged fact, the value of real-time data can’t be underestimated – for operational efficiency, better decision-making, and business success. But while businesses implement technology and make proactive use of data to achieve their goals, so do governments – and when it comes to tax mandates today, that can have a huge impact on your operations. Let’s take a deep dive into the challenges and risks businesses face to meet VAT regulatory obligations and compliance in the digital world of global financial reporting.

The power of real-time data

Real-time tax reporting has become the norm, going hand in hand with real-time monitoring. A tax gap has serious implications. Governments are not willing to lose revenue from VAT businesses owe them due to inaccurate reporting or negligent processes, or inadequate tax collection systems. Gone are the days of after-the-fact reporting and slow-moving manual processes and tax systems. Governments are now in your data, all the time. Digitisation is today’s global tool for transparency and reforms, enabling governments to closely monitor financial transactions, expand their capabilities to keep an eagle eye on compliance with tax mandates, reduce tax gaps, and enhances the ability to act quickly if an organisation is not reporting information correctly. This elevates the risks of non-compliance and means that companies must prepare for real-time oversight and enforcement.

Evolving and changing data mandates

Organisations face multiple challenges with the rapid shift to e-invoicing as a global standard. One is the ability to ensure constantly and quickly updated tax codes and mandates in an evolving and changing tax landscape. On top of that, data mandates are not consistent from country to country, and different regulatory authorities can take different approaches, creating uncertainty for international operations and increasing the risk of non-compliance. The challenge is to meet each country’s tax mandates, working with an infrastructure that also enables the business to monitor compliance status in real-time.

Tax authority enforcement

By implementing digital tools and processes, regulatory authorities today can easily enforce government tax mandates and ensure businesses meet demands, without delay. Using advanced technologies governments can effectively monitor and track incorrect reporting, presentation of transaction data, and expose tax fraud. Real-time monitoring in a digital world means expedited compliance with swifter and more severe penalties than ever before.

Taking action to meet a changing compliance reality

As tax reporting becomes more complicated, the ability to effectively scale operations, maintain control and ensure compliance has become increasingly important. Addressing the issue of changing and complex global tax mandates has become a top priority for organisations, requiring the ability to develop effective strategies to remain compliant while maintaining long-term business plans. Incorporating the right technologies and processes on an integrated platform is critical to enhancing efficiency and effectiveness, streamlining and automating operations, providing up-to-date information and rapid response to policy changes and demands.