Last week, In The Sunday Times special supplement of “Future of Tax & Accounting,” CEO of Ryan VAT SYSTEMS ‘Andreas Kozanitis’ gave an interview to discuss about the future of tax and accounting in Europe.
This is an Q&A with Andreas Kozanitis, chief executive of Ryan VAT system by Sunday times :
Q: Real-time reporting is new, but how ground-breaking is the concept?
AK: Many of the requirements have been around for ages. It's just that the information needs to be prepared and presented in a specific way, in XML format, and submitted electronically. In France, for example, there has been for many years a requirement to store accounting data in an electronic format ready for inspection with a few days’ notice, so companies trading there will already know how to comply with a lot of the demands. So although the systems such as SDI in Italy and SII in Spain are new, the concepts are well established.
Q: How hard is it to comply with real-time reporting in the EU?
AK: In technical terms, it is not too complicated. The big enterprise resource planning vendors have their own solutions for clients to use. And specialist tax consultancies will have their solutions. At Ryan VAT Systems, we have an IT department developing our own solutions for all new real time reporting requirements throughout Europe. The challenge is that each European country has its own unique system. That can make it hard to master for multinationals trading in multiple countries. But electronic VAT invoicing is a new challenge for companies. There are deadlines to work to and compliance involves multiple departments, from IT to finance, that would rather focus on things they think are more important. Overall, companies will find, with the right advice, they can comply without too much difficulty.
Q: What do companies tend to get wrong?
AK: Normally the problems stem from the language used by the tax authorities. There can be issues with understanding the precise requirements. Some of the terms can be ambiguous. It's also true that the requirements are in the language of the relevant tax authority. If you're dealing with Poland, the advice from the Polish tax authority is in Polish. That may not be easy for a UK company. It's also true that each Q AK European country has its own regime. Companies may partner with a different consultancy in each country, leading to a patchwork. So, if you deal with four countries, you may end up talking to four providers, each with their own methods, formats and types of reporting. This can be chaotic. It is better, in my opinion, to work with a single partner with the geographic reach to provide a unified service across the European Union and beyond.
Q: Does Brexit present an additional challenge?
AK: It could. Right now, the UK is a member of the EU, so doing business is comparatively easy. But when the UK leaves, new obligations will appear. UK companies trading in Spain, for example, will need what is known as a fiscal representative. This party may be jointly liable for the VAT owed by the business. That is quite a big risk for the party undertaking this. As a result, many companies off er tax compliance services, but not fiscal representation services. It is something UK companies will need to consider.
Q: What can we expect in the future?
AK: This is just the beginning. We will see a continued march towards automated digital reporting in real time. Robotics and artificial intelligence will play a role, ensuring the information is correct. Invoices will be automatically generated and exchanged. So electronic tax fi ling is not just an end to paper processes, but an end to manual processes. The nature of accountancy as a job will change from processing to strategy. I think that's an incredibly exciting future.