A new whitepaper has revealed information about the evolving European VAT landscape, with the situation in the UK, Germany and Sweden.
Respondents, who work in finance and tax, provided details about the challenges faced by those on the frontline of tax, with findings published in the ‘meeting the challenges of a challenging tax landscape’ whitepaper.
The European VAT landscape is undergoing a digital transformation, with electronic taxation systems set to be implemented, as well as a shift to real-time rather than periodic models.
It is hoped that this will simply tax’s traditionally paper-based reporting system and cumbersome processes, as well as enhancing compliance to address the tax gap.
But because developments have not been universal, there is a patchwork of regulations that are fuelling both confusion and complexity.
The change in the European VAT landscape is evident by the fact that 46% of those companies canvased said they aren’t confident about their capacity to comply with the patchwork of European e-invoicing regulations and, specifically, the growing necessity for real-time reporting in countries implementing this is becoming a challenge for UK firms.
Of the UK’s firms, 29% said this is their most pressing issue, exacerbated by the fact that UK firms diverting the fewest resources of the three regions to the process, as well as not possessing in-house VAT expertise.
It leaves those responsible scrambling to submit accurate information within deadlines.
VATGlobal’s CEO, Gareth Kobrin, said: “The ongoing introduction of new tax regulations across Europe is leaving organisations scratching their heads around VAT.
“In the UK, initiatives such as Making Tax Digital are adding complexity when it was intended to streamline, and companies don’t yet have the right measures in place to comply.
“It’s an even trickier situation for exporters to nations with more specific rulings around document formats, such as Italy and Spain.
“Furthermore, many firms are making life more difficult by seemingly not making the most effective use of the limited resources they have made available to the function.”