Vertex Exchange Europe

Host Kiran Padam is joined by Peter Boerhof, Senior Director, VAT and Gunjan Tripathi, Director, Product Solutions Marketing at Vertex. Their conversation explores the evolution of e-invoicing and the challenges and goals of tax administration in the digital age. It covers key milestones in the development of e-invoicing, the convergence of indirect tax compliance into core finance systems, the shift towards an e-clearance model, and the impact of continuous transaction controls. They also discuss the changing concept of an invoice, the practical realities of compliance and the sources of data for tax authorities. 

Key takeaways:

• The evolution of invoicing has progressed from traditional paper invoices to electronic invoicing, with key milestones including the development of EDI, XML, and real-time reporting.
• Various formats of e-invoicing create complexity for businesses operating in multiple jurisdictions, and VAT managers face challenges in handling different processes and authorities.
• Invoice electronification has led to an increase in the amount of information included, which can sometimes create complexity and debates around tax consequences and jurisdiction.
• Continuous Transaction Controls (CTC) allow tax authorities to monitor businesses more closely, but there is a concern about maintaining data integrity and preserving information for its intended purpose.
• The traditional tax system faced challenges in keeping up with the changing economics, business practices, and consumption patterns, which led to the need for modernization and evolution.
• Tax authorities aim to achieve better tracking of transactions, closing the VAT gap, fighting the grey economy, and creating more transparency with the new tax administration system.
• Businesses can achieve accurate, complete, and consistent data by leveraging technology to automate data collection, transmission, and quality checks, reducing the risk of human error.
• Tax professionals need to shift their mindset and adopt new processes that focus on internal audits, controls, and frameworks that can handle 100% of transactions without manual intervention.
• The role of a tax professional today has shifted from a purely tax-focused role to one that requires a broader perspective, including understanding accounting, financial systems, supply chains, data sources, and software solutions.
• Technology, such as AI, can support tax professionals by automating data collection, transmission, and quality checks, as well as providing insights and advancing tax automation.

2:45: Evolution of Traditional Invoicing to Electronic Invoicing

6:00: Convergence of Indirect Tax Compliance into Core Finance Systems

10:00: E-Compliance and Continuous Transactional Control

13:42: Practical Realities of Continuous Transaction Controls

20:00: Evolution of Tax Systems and E-Invoicing

24:44: Sources of Data for Continuous Transaction Controls

30:00: Convergence of Tax and Core Finance Processes

33:00: UK MTD Route for VAT and Technology's Role

37:42: Shift in Skills for Tax Professionals

40:51: AI and Machine Learning in Tax Industry