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HMRC has moved the project “Making Tax Digital” (MTD) to the next stage by starting the testing phase with large companies. This testing phase will end in April 2019, where business who exceed the VAT threshold will be required to use the MTD system for VAT purposes. Businesses who do not exceed the VAT threshold are not required to use the MTD system but may subscribe to it voluntarily.
The idea of MTD is to automate tax records and reporting, starting with the VAT obligations. HRMC is promoting the development of third party software which communicates via API’s with the platform of HRMC.
Tax technology in Europe
MTD is introduced to automate the communication between companies and the UK tax authorities. The digitalization of tax records and submission has become an important development, requiring companies to be compliant with the new standards.
Tax technology reporting obligations are an increasing trend in several European countries. As from 1 July 2017, Spain has implemented the SII requiring real-time reporting of VAT ledgers for VAT purposes. As from 1 July 2018, Hungary will introduce real-time reporting.
for invoices with a VAT amount exceeding 100.000 HUF (around €320).
A growing number of EU countries also require tax technology obligations in case of tax audits. The standard proposed by the OECD, called SAF-T, requires companies to provide the tax authorities with files in a specific format. Portugal, Poland, France, Austria and Luxembourg have already introduced this standard. Some of these jurisdictions require SAF-T periodically and not only in case of tax audits.
At Marosa we can help you complying with new tax technologies like the Spanish SII, the Portuguese, Polish SAF-T and the Italian Spesometro. Contact us to learn more about our tax technology services.