Global Trend – Electronic Invoicing and Digital Tax Reporting

We are witnessing more and more countries implementing a digital tax reporting system. There are a few reasons countries globally are moving away from traditional tax reporting channels into digital solutions. From one side, we have the perspective of the tax authorities and connected institutions. Their reasoning is mainly connected to the concern about developing a more effective system to combat tax fraud, tax evasion, and avoidance of taxes. This is one of the main reasons they established tax reporting tools that receive and transmit transactional data in real-time or near real-time. 

Businesses see digitizing tax reporting as the advantage to operating more efficiently, streamlined, and standardized. Of course, this does not mean that taxable persons are super happy that they must adapt to new regulations and invest significantly in developing new compliance systems. 

Looking from a global perspective, one thing is inevitable regarding tax reporting: more and more countries will adopt modern reporting systems using electronic channels for data transmission. 

It seems that electronic invoicing is being chosen as the most efficient type for combating tax fraud. Some countries have implemented different types of digital reporting that operate simultaneously or successively, depending on the mechanism in place. Here, we can see that sales data from various sources is being captured, analyzed, and transferred for, e.g., tax auditing or pre-filing tax returns. 

Global Overview – Expected Digital Reporting Mandates