Overall, the TA executed 19 meticulous inspections at major events like the Assembly of Trumpet Players in Guča, Nisville Jazz Festival in Niš, Tešnjarske večeri in Valjevo, Beer Day in Zrenjanin and The Grill Festival in Leskovac. For this reason, their dedication led to the identification of irregularities in 16 instances, leading to swift bans.

Remarkably, the Tax Administration’s inspectors consistently uphold stringent standards. They undertake comprehensive evaluations of field records through electronic fiscal devices, aligning with regulations related to the new e-fiscalization model implemented in Serbia in 2021, called System for Fiscalization Management, powered by TaxCore® to ensure a proper strategy against tax evasion. 

Noteworthy is the fact that the Tax Administration of Serbia is armed with powerful tools in the form of the new fiscalization model. This model equips them with real-time data on traffic across all retail locations in Serbia. This ingenious approach enables the application of risk analysis and precise targeted checks, empowering them to promptly address any non-compliance among taxpayers.

Video archive (April, 2022), opening ceremony of S.U.F. monitoring centre at Tax Authority Serbia, source: https://www.alo.rs/

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Since January 1st, 2020, all companies dealing with the public sector, regardless of their size, must send their invoices in electronic format. Likewise, all public entities in the European Union are required to accept electronic invoices addressed to them. The main objective of introducing e-invoicing is to simplify sending and receiving invoices, as well as prevent tax evasion. The process of introducing e-invoicing obligations for B2G, which started in 2017, has been completed. In France, they do this via the Chorus Pro platform (also supported by PEPPOL); single portal to address all public entities.

In addition, the 2020 finance law generalizes this requirement to the private sector, since all companies must be able to receive invoices in electronic format from July 1, 2024. Governments will impose on companies an obligation to issue electronic invoices for B2B sales, as well as to submit invoice data to the tax authorities, gradually between 2024 and 2026.

These measures are necessary to establish:

– mandatory e-invoicing for domestic transactions between companies;
– an e-reporting obligation (transmission of billing and payment data for transactions carried out with natural persons or foreign operators).

This would translate to:

– an obligation to receive electronic invoices, by all companies from 2023, and
– e-invoicing and e-reporting obligations for sales operations, applicable from 2023 for large companies, from 2024 for medium-sized companies and from 2025 for SMEs (companies with fewer than 500 employees) and VSE (company with less than 20 employees).

The notable difference will be the “physical” receiver of the invoice issued. While before the seller transmitted it directly to the buyer, the implementation of mandatory e-invoicing will result in the appearance of an intermediary in the invoice transmission chain. in fact, the seller will have to always send their invoice electronically to an individual certified as a centralizing public platform or directly to the centralizing public platform. The platform (or certified individual) would then be responsible both for transmitting the invoice to the customer and for transmitting the billing data (via the centralizing public authority in the event of the intervention of a private operator) to the tax administration.

The administration has changed its initial position by supplementing the obligation to transmit invoices in electronic format to the tax authorities for transactions carried out in France by professionals (“e-invoicing”), with an obligation to transmit billing data (“e-reporting”), applicable to sales transactions carried out with natural persons (“B2C”) and foreign operators (B2B sales, intra-Community sales and exports). The e-invoicing model chosen is a tax clearance model already administrations use around the world, with the difference that this model does not directly transfer the data to the tax administration but via certified agents or the centralizing public platform. This intermediary collects taxpayer data and then shares it with the tax administration via the e-invoicing portal. The issuer and the recipient of the invoice can also communicate without the intermediary of the agent.

The e-invoicing portal

The e-invoicing portal supports three modes of account transfer that can be used by taxpayers: EDI, API or Web service. Also, the e-invoicing portal uses three data transmission formats: UBL 2.1, CII and Factur-X.

Finally, the counterparty of the seller (professional buyer) would have to transmit the data relating to the payment of these invoices (status, date of payment) to the tax authorities. This data does not appear on the invoices but constitutes information necessary to determine the due date for VAT when this occurs on collection (provision of services).

Many countries have undertaken the initiative of having the e-invoicing control system with the aim of reducing the gray economy and tax evasion. The certified system is an important and new component of this initiative, put in place so that taxpayers can electronically secure each transaction at the time of sale.

The TaxCore® solution

One such system is TaxCore® – a scalable software solution that enables tax compliance through usage of commercially available technologies and public APIs to issue fiscal invoices in online/offline environment and collect audit data. It suppresses tax evasion, decreases the activity of gray economy and fights frauds.

There are commercial solutions that address all of the above-mentioned requirements. These solutions enable the businesses to exchange and issue invoices protected by digital certificates, as well as the Tax Authorities to have clear, secure and reliant insight into the content of such transactions.

TaxCore® solution works within any type of clearance mechanism model where single service provider connects both the supplier and the buyer to its platform to offer e-invoicing and other supply chain services.

TaxCore® system can receive and transmit e-invoices issued by supplier in online or offline regime in the same manner.

The system receives all e-invoices in a centralized database.

The system authenticates all e-invoices through a secure authentication method.

The TaxCore® system verifies that all e-invoice data are correct through the automated verification of the validity of the Taxpayer Identification Numbers (TIN) or corporate number or national ID number, as well as the tax calculation.

TaxCore® has the option for buyers to verify that the tax administration receives the e-invoice and that it goes through automated verification.

TaxCore® makes it easier to develop and generate reports and statistics.

E-invoices in TaxCore® centralized database are available to both sellers and buyers.

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How does TicketBai works?

To be able to use TicketBai’s invoicing system, taxpayers will need to have a specific software validated by the Tax Authority’s institutions that can generate QR and TBAI codes in their receipts or invoices submitted. TBAI, which gives its name to the whole program, refers to the invoice’s ID number in the system’s database and proves the relationship between an invoice and its subsequently generated TBAI file. This file is then submitted to the Tax Authority certifying that the information was correctly received.

The invoicing software that taxpayers will need to use has to comply with the following criteria:

• Generate invoices for each product or service sold.
• Sign using a digital certificate that makes it possible to introduce the QR ad TBAI codes.
• The ability to send that information to the Tax Authority.
• Lastly, that it has the capacity of creating a BAI file.

Taxpayers who do not possess an invoicing software compatible with TicketBai will need to replace it with another new invoicing system that is able to adapt to these new requirements.

Why TicketBai?

The main focus of this new system is to effectively control the cash registers belonging to specific sectors handling with payments in cash and which were not doing receipts or legal invoices as expected.

The Basque Country’s Tax Authorities have estimated that up to 90% of small retailers follow the above-mentioned practices to evade taxation. For instance, in 2016, Bizkaia’s region reported to the Tax Authority to have discovered 450 million euros belonging to tax fraud in the year 2015 alone.

To foster this initiative and make everyone comply with TicketBai regulations, there will be two types of new sanctions: one for not complying with the law and another one for destruction, manipulation or data deletion. Sanctions vary depending on each case, but those not complying with the law will have to pay a penalty of up to 20% of their last year’s turnover, a minimum of 20.000€, regardless of their turnover capacity or type of business.

The tax authorities adopt a similar approach for those manipulating, destroying or deleting valuable data, in this case, penalties will amount to up to 20% of their last year’s turnover, a minimum of 40.000€ and they can affect both the supplier and the user of that invoicing system. In case of a repeated offender, sanctions will amount to up to 30% of their last year’s turnover in both cases and to 60.000€ minimum penalty for destruction, manipulation or deletion of data whereas for lack of compliance, penalties will reach a 30.000€ minimum. These are harsh measures that show how much the Tax Authority is willing to punish infractions and avoid fiscal fraud at all costs.

Any incentives?

There are incentives too; for those companies adopting the system earlier there will be a 30% income tax reduction or a 60% income tax decrease depending on the region in which those businesses are located, with a maximum deduction of 5.000€ for over one year.

Next step, Spain?

While in Spain there is not yet a defined project to extend this system, the idea is to implement it to the rest of the country progressively. This is due to the fact that the Spanish Tax Authorities have seen similar positive results in the rest of the European Union, and they have experienced also some good results by adopting the SII system that is now able to collect a third of the total VAT revenues in Spain augmenting them by 17%.

It is clear that with the advancement and proliferation of new technologies capable of monitoring tax activity as well as detecting tax fraud, more and more countries will invest in implementing similar strategies to foster tax revenue and avoid tax fraud.

TaxCore® and what it offers

With the successful implementation of TaxCore® in Fiji and Samoa, the Tax Authorities of those countries are sure to monitor and collect the tax revenues that are due to them from taxpayers, making sure also to fight against the gray economy, compensating and rewarding those who comply with the model. The system works perfectly with the Tax Authorities as the system sends the information in real-time and every receipt is verifiable. They ensure collaboration from the general consumer population by rewarding the ones reporting any discrepancies or issues they may experience with their invoices or receipts, as for each scanned or reported invoice consumers can win prizes from vendors, working as a lottery for them.

Taxpayers also benefit from this experience the system protects them from unfair competition coming from fraudsters, it minimizes the cost of compliance per taxpayer and sales point and it also improves and simplifies communication between taxpayers and Tax Authorities, as the system performs reporting in real-time making the tax administration more approachable and reducing the chances of misunderstanding from both sides.

To conclude, this new fiscalization system procedure adopted by the Basque Country’s Tax Authorities is a step in the good direction towards ensuring a proper tax return for this region. If well implemented, it will help them track down fraudsters easier and quicker, in real-time, making sure also that the resources that were previously dedicated to tax fraud investigation are used elsewhere where they are needed the most and engaging all actors in the economy to participate and collaborate towards the same goal, a just and effective tax system.

The post TICKETBAI – SPANISH BASQUE COUNTRY’S NEW SOLUTION appeared first on Dti.

Tax Fraud in the EU

Only in 2017, the member countries of the European Union lost approximately EUR 137.5 billion to tax fraud according to data on the EU’s official website. Unfortunately, this trend continued up to 2019 where not much has changed and the loss is still measured in billions. The issue hides behind the differences in tax collection between the members. For example:

• Luxembourg – 0.7% VAT gap
• Sweden – 1.5 VAT gap
• Cyprus – 0.6% VAT gap

Evidently, tax collection and paying for taxes in these countries does not present an issue. However, the situation in some other EU states is completely the opposite:

• Romania – 35.5% VAT gap
• Greece – 33.6% VAT gap

These results mostly indicate the performance of national tax administrations and whether they require modernization or not.

Using Zappers as a Means of Tax Evasion

Zappers are add-on programs that merchants with ECRs or POS systems often tend to use. The problem with them is that they don’t skim all sales, and they never skim credit card transactions. This allows for a lot of space in tax evasion that tax authorities have no way of detecting.

Disappointingly enough, zappers are mostly used in developed economies – for example, Sweden, Germany, and Spain, just to name a few. In Sweden alone, approximately 70% of the ECRs have Zappers installed. Therefore, Sweden is suffering great amounts of tax loss every year that could help boost the economy even further.

Out of the EUR 137 billion in tax loss in the EU, about EUR 20 billion is lost in the restaurant sector alone. The four countries that lose the most in tax revenue are Germany, France, Italy, and Spain.

Total Tax Revenue losses in the USA

On the other side of the pond, the situation isn’t much better. Compared to most of the Western governments, the USA falls very far behind. In 2018, tax revenue at all levels of the US government was 24% of the overall GDP.

The States are behind most EU countries, such as France, Denmark, Belgium, Czech Republic, Turkey, and Greece. They are also behind some Asian countries, such as Japan and South Korea. Making tax revenue losses in the USA, a big issue.

How Are Countries Fighting Against tax revenue losses?

Given that most developed countries are well aware of these problems, which methods are they exactly using to fight against them? Unfortunately, the methods being used are quite outdated and still rely on traditional audits. However, the governments are slowly realizing that the best way to fight technology is with technology.

TaxCore has helped developing countries such as Fiji and Samoa completely evade issues similar to these. Thanks to the complete digitalization of tax collection, any fraud or evasion is noticed immediately. Once a potential tax fraud is discovered in real-time, the tax authority can immediately send out an inspector to investigate the issue. This further motivates taxpayers to abide by the law and the loss of annual tax revenue remains at its minimum.

To find out how TaxCore can help governments battle tax fraud, feel free to contact us.

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Many are wondering, what now?

We Need a Quick Fix

Most governments are genuinely worried about how businesses will handle this situation. However, not many countries can afford to help their private sectors, at least for now. On top of that, the health care systems are crumbling under the pressure of the new virus and the number of infected people across the globe. This automatically means that most governments will prioritize helping hospitals instead of corporations.

For companies in many countries, this means that they will have to rely on themselves; or to be more precise, on the money they managed to save up over the years. The situation the world is currently facing came out of the blue, and as such, nobody was prepared for it. Now, what are the plans corporations are coming up with, and does it by any chance include taking advantage of the crisis?

Who Is Protecting the Buyers?

Due to the pandemic, countries don’t have the time nor resources to monitor their taxpayers properly, which automatically means that buyers are quite unprotected. Has what we feared the most started to happen?

In times like these, the population rests on the idea that producers of general goods and medical supplies will keep their prices intact, competing with each other and creating the best price for consumers. Unfortunately, the percentage of those who are taking advantage of the epidemics is rising.

According to this NY Times article, many pharmacies in the USA alone have raised the prices of their products within a day, making them twice, if not three times more expensive than only 24 hours before. A lot of consumers have started complaining that some supermarkets have started doing the same thing. This is where a country’s tax system comes in to play, and it might be the right time for every government to assess the functionality of its tax collection system. This system serves as the forefront in protecting both the general population and the economy of a country.

So, how modern are these systems? Are they digital yet? And can they actually help their governments the way they were intended to? The sad truth is that in most countries, they’re not. They are somehow still stuck in the 20^th century, and this might be the right time to consider a change.

TaxCore Offers the Perfect Solution

As a platform, TaxCore offers the most modern tax collecting system that ensures transparency. Moreover, it has demonstrated to be the best tool to fight against TAX evasion and VAT fraud in the countries that implemented it. Our platform allows for tax offices to have an insight into every single receipt going through a system, no matter whether it comes from a supermarket, pharmacy, gas station or a restaurant.

And while some governments are now faced with a problem of controlling the prices of medical supplies, the countries which implemented TaxCore know exactly whom to keep their eye on.

In a recent development, the president of Russia, Vladimir Putin, was asked what to do with drugstores that raised the prices of face masks, and his answer was short and to the point – revoke their licenses. Although quite an effective solution, having a good tax system could easier help identify businesses that are breaking the local laws better, and separate bad apples from good apples.

How Do We Protect Consumers’ Rights?

All over the world, people have started panic-buying the necessities, medicine included. In the Republic of Fiji, as of March 19th when the state of emergency has been declared by the Prime Minister, TaxCore has registered a major increase in prices of face masks, antibiotics, and painkillers.

A lot of pharmacies have started selling face masks for prices of up to 2 or 3 times higher. Checking our TaxCore database, we easily confirmed that the difference in prices of these products from January up to today was over 15%.

Having a clear insight in these practices, the FRCS (Fiji Revenue and Customs Service) can easily put an end to these. All the proof they might need is already in the system, so they can easily penalize any business taking advantage of the present situation.

Once the epidemic comes to an end, one thing remains for sure – many governments will have to make a significant change in the way they govern local economic activities. And the change must come from modernizing taxation in the first place. To see how TaxCore can help you in times of crisis, feel free to get in touch through our contact us page.

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The point of the presentation was to bring up to attention that the systems used by tax offices worldwide are outdated, and they fail to find their place in the 21^st century. Mr. Goran spoke about how thanks to technology, each and every customer is someone who can register fraud detection. Every digital (or physical) receipt is a chance for a consumer to win an award, therefore they will always scan the QR code in order to enter the lottery. This further shows the legitimacy of the receipt and any possible discrepancies the local tax office can easily detect.

Just as 2017 was important for Data Tech International as a brand, 2018 was important for TaxCore and its many future achievements. TaxCore serves as a perfect example of how real-time tax compliance can be easily enforced without damaging taxpayers.

Moreover, a digital invoice system such as TaxCore is the perfect tool to detect and fight fraud without the long procedures that usually end up in frustration on both ends.

This workshop, as other in the past organised and chaired by Prof. Dr Jeffrey Owens at the WU, have provided practical insights on the global trends of VAT/GST adoption and application to digital transactions, treatment of online platforms and ways to achieve higher level of tax compliance. Government officials, international and regional organisations, business and academics have mutually benefited from the exchange of opinions, experiences and best practice.

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Since the first official appearance of computerized electronic sales suppression in the ’80s in the state of Connecticut, the FTA has shed light on this phenomenon and gave the prime spot to the elephant in the room for the first time on their agenda.

The list of attendees was wide and both government and non-government officials attended. A lot of revenue compliance officers from states such as Alabama, California, Arkansas, Idaho, and many other states took part in the conference.

Mr. Goran Todorov from Data Tech International and Mr. David Deputy from Vertex presented together on the topic “Securing Fiscalization via Digitization.” The point of their paper was on how much tax-loss there was from tax evasions and how in most countries these units can be measured in billions; the USA being no exception.

You can find out more on this paper here

Using modern technology is probably the most powerful tool against tax evasion and tax fraud. Moreover, there were even a lot of big, international companies that took advantage of poor tax collecting laws in many countries. Proving the point that no one is quite immune to this. With systems like TaxCore, illegal practices like these can be fully brought to a halt as tax authorities have the full picture of how abiding corporations are.

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