Testing of the automated VAT declaration system is expected to finally start this autumn, and the system is scheduled to be ready for deployment in 2024.
The introduction of eVAT was originally planned for 2021 but was postponed in the last moment.
However,
the development has continued, with the development of the original conception and
the creation of the machine-to-machine method. Usage of the automated systems
will not be mandatory as a start, however everyone should at least monitor
their VAT-balance.
It is also
worth it to have a look at the differences between the own calculation of the
company and the draft calculation of the tax authority, as these may point out errors
that could generate a selection for tax audit – drew our attention Judit Jancsa-Pék,
lead advisor, partner at LeitnerLeitner.
The aim of the eVAT system, which was planned to be introduced in 2021, is the usage of online invoice data, cash register data and customs data, to automatically prepare a draft VAT return, which can be finalised by the taxpayers via a web interface.
It can help
speed up the preparation process of VAT returns for businesses with small
turnover and simple activities, however it cannot simplify the complex
administrative procedures for larger corporations.
The tax and
accounting professionals, further the companies concerned have therefore
proposed extending the service with usage of the machine-to-machine method.
These needs have given rise to another possible concept for the automation of VAT returns: submission of VAT returns with the machine-to-machine method (M2M).
The development of the so-called SAF-T („standard audit file for tax”) program assists the implementation. The aim of SAF-T is that data from company and accounting systems is provided to the tax authority in a standard and bounded structure – in an XML data file - i.e. the taxpayers’ entire accounting records can be transferred. The development of the SAF-T system has recently focused specifically on subtasks related to the processing of VAT data, in September 2022 the standard VAT codes, including the e-VAT and M2M drafts, were published, which will be the basis for further communication. At the beginning of 2023, the interface specification, the process description and the XSD schemas for linking the accounting software and the eVAT declaration were also published. This will enable the two-way exchange of data between taxpayers and tax authority’s system.Not only
the tax authority receive data from the businesses, but the companies can also
import data from the system of the tax authority into their own management
systems; it is also possible to revers data from the data lake of the tax authority
for the client using a special software.
The consolidation and standardisation of the database was necessary for the operation of the service and the automation of VAT analytics.
For this reason,
a general expandable and change-sensitive coding system, the standard tax codes
have been developed.
They make
it clear which line on the current VAT return should be used to enter the
information of a document and which tax rate should be applied. Additional
information and notes can be added to the standard tax code, in order to make
the classification more detailed.
It will no longer be necessary to manually modify the VAT analytics in order to prepare the VAT return, further the manual completion of domestic itemized reports containing detailed data on domestic purchases will no longer be required.
Further,
the warning messages of the online invoicing system will also be sent to the
clients, accordingly that partners can immediately correct any incorrect
invoices.
Data downloading
can help you to check your accounts and detect the eventually administrative
errors.
Once the
M2M system is ready and running, there will be three ways to prepare VAT
returns.
The system
of M2M, eVAT and online invoice system will be interconnected.
The introduction of this systems will make tax audits easier and more efficient.
The tax
authorities will be able to perform tax audits remotely without the taxpayer’s
knowledge, even using artificial intelligence.
This is reason why we need to understand these opportunities as much as possible, to be able to take the advantage of automation and keep control as much as possible – Judit Jancsa-Pék calls attention to this.
We need to
start to review our business processes, our old and new partners, our
transactions, and the form and content of our invoices.
As part of the preparation, internal developments such as IT or processing practices should be made to make it easier to fit the way our business with the automated VAT returns.
