As we all know, insurance premium tax (IPT) differs country to country and if your company writes insurance cross border, tracking every jurisdiction’s IPT rate can be challenging.

We’re often asked by insurers about IPT regimes in overseas France because they vary island to island. Not only does each territory maintain its own IPT regime, but these differ to Mainland France as well.

Many French and international organisations have subsidiaries in these overseas territories so it’s important to understand how the different IPT rates and filings affect compliance.

Some French overseas territories known as, such as Guadeloupe and Martinique, are treated as a local French district so they are declarable on a French IPT return as though they are located within the European Member State. Others, known as “Collectivités d’Outre-Mer” have greater autonomy and set their own tax affairs, including their own IPT regimes, risk profiles and premium stipulations.

Before we begin, it’s worth noting that for comparison’s sake France’s default IPT rate is currently 9% and filings are monthly.

French Polynesia

IPT in French Polynesia is currently 10% and filings are monthly.

Made up of a collective of more than 100 smaller islands, this South Pacific archipelago is France’s biggest only overseas country. The law within French Polynesia states taxes must be filed by a local representative, which can make it difficult for insurers operating from afar.

If you don’t have a fiscal representative in French Polynesia, you can appoint what’s referred to as a ‘special agent’ – typically someone from your insurance company that acts as a legal representative – to sign the tax return.

Most organisations prefer to avoid this though, as the title comes with significant legal ramifications as the responsibility of the special agent is placed on an individual, rather than the organisation.

New Caledonia

The current IPT rate is 7% and filings are quarterly.

As in the case of French Polynesia, there is a legal requirement for taxes to be filed by a local representative.

In the last few years, agreements have been concluded with a select number of countries (Australia, Belgium, France, Ireland and Luxembourg), facilitating the access to the New Caledonian insurance market to their insurers.

There is a possibility that additional countries could be added at a later date, however there’s no timeline for this. Naturally, this makes New Caledonian IPT more challenging than most.

Saint Martin

The default IPT rate in Saint Martin is 5% and filings are monthly.

IPT in Saint Martin doesn’t require a local representative to process taxes but there is a requirement for the insurer to be authorised and registered in France in order to write insurance in Saint-Martin.

But IPT is not the only tax applicable on insurance premiums in Saint-Martin, parafiscal charges such as the Major Risks Prevention Fund levy, similar to the levy applied to CatNat premiums in France, is also due on motor and property risks.

Often, the most complicated element of filing IPT in French overseas is the fact that insurers are not based in the specific territory. Filing returns overseas requires in-depth knowledge of local requirements, laws, regulations and often a local partner experienced in assisting with processing.

Keeping up-to-date with changing tax rates, different filing formats and deadlines as well as understanding interpretations of local rules can be challenging especially when writing business in non-core jurisdictions. If you have questions about IPT within France or its overseas territories, get in touch with us and we’ll be happy to help.

Take Action

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The post Navigating IPT Regimes Across the French Overseas Territories appeared first on Sovos.

• Compared to 2019 data, in the first week of April 2020 volume (liters) of wine shipped increased 139 percent, the number of shipments increased 30 percent and the value of shipments increased 102 percent.
• In April 2020, the top ship-to states by volume shipped were California, Texas, Pennsylvania, New York and Florida. Pennsylvania is a new addition to the top five from 2019, taking Illinois off the list.
• All price points of wine bottles, except those $150 or more per bottle, registered double-digit lifts in off-premise sales.
• The off-premise sale of 3L wine boxes has increased 82 percent.
• Online sales of all alcoholic beverages continued to climb with increases of 246 percent through March 21, 291 percent through March 28, and 441 percent through April 4.
• DtC wine shipments in March 2020 increased 18 percent in value and 30 percent by volume over the year prior.
• March 2020 shipment levels were in the range of what would be typically sold during the highest selling months of October and November. 

The trends that we’re seeing in the past month and a half could have lasting effects on the beverage alcohol industry, long after shelter-in-place orders have been lifted. Consumers may continue to rely on ecommerce for their beverage alcohol purchases after traditional retailers reopen. Also, the temporary changes to beverage alcohol regulations in participating states could become permanent, or at least help pave the way for new, less restrictive rules and regulations to be adopted in the future.

For more data and information regarding the DtC wine shipping channel, download the free 2020 Direct-to-Consumer Wine Shipping Report today.

The post DtC Shipments Continue to Increase as Buying Channels Shift appeared first on Sovos.

Digital transformation of tax gathers pace

Partly in response to this fear, the digital transformation by tax authorities across the globe shows no sign of slowing as governments continue their quest to reduce fraud and tax evasion to close VAT gaps. Inspired by successes in Latin America and other pioneering countries, tax authorities around the world act independently to enforce their own specific technology-based Continuous Transaction Controls (CTC) frameworks. As a result of this global revolution towards the transactional enforcement of consumption taxes, many companies with a multinational footprint are finding themselves under growing pressure to make sure their invoicing and reporting processes are integrated with diverse tax administrations in each and every country in which they do business.

Archiving – more than just storage

It’s understandable, against this backdrop, that the electronic archiving of invoices has not received as much attention as real-time or near-real-time data integration. To many companies, the compliant archiving of invoices and similar original tax documents has remained little more than a simple box-ticking exercise. And yet, the introduction of CTCs coupled with the digital transformation of business is fundamentally changing the nature and importance of archiving. Archiving and maintaining excellent evidence of business transactions will soon become crucial to ensure that businesses can substantiate their version of the truth in case of inconsistencies between their records and the ledgers that tax administrations constitute on the basis of CTC data. Excellent evidence management, however, needs to consider the increasing fragmentation of business transaction management over multiple cloud-based vendors and platforms.

The post E-archiving for VAT: Compliance in a Digital World appeared first on Sovos.

Given the extension, now is a good time to recap some of the main features and the surrounding compliance regime.

Scope

New JPK_VAT is a periodic filing combining the current JPK_VAT single audit file and VAT-7M (monthly) and VAT-7K (quarterly) VAT returns within one document.  It has the same deadline as the current separate submissions of 25^th of the month following period end. Taxpayers filing quarterly will also need to submit a monthly registration part. JPK_VAT will not include any other periodic VAT filings (e.g. VIES declarations, which still need to be submitted separately using form VAT-UE).  Businesses should ensure their compliance processes are organised to reflect the change.

Additional data

The new JPK_VAT requires additional data to that currently collected in the separate declarations. For example, sales records will need to include indicator codes specifying certain types of goods and services, transaction types, and proof of sales. Purchase records will need to include tags specifying proof of purchase, along with tags for transactions subject to specific procedures, e.g. goods imports and split payment. For example, the marking ‘MPP’ should be applied to any invoice documenting a split payment transaction (any categorised in Article 15 of the Polish VAT Act) with a VAT-inclusive value of over PLN 15,000; this invoice is recorded in the MPP field within JPK_VAT. Such marking and recording helps make audits more efficient for the tax authority, but businesses should review their invoice content requirements and align AR, invoicing and reporting personnel to minimise errors.

 Penalties

It was originally intended that a financial penalty would apply to any mistake found within a submitted JPK_VAT file. The Ministry of Finance has recently confirmed that penalties will instead be applied on a discretionary basis, subject to appeal. This suggests minor discrepancies won’t necessarily incur a fine if they don’t result in material risk to VAT payments by the taxpayer or by its immediate suppliers or customers.

Corrections

The most recent guidance states that corrections to declarations submitted in the previous and now replaced JPK_VAT and VAT-7 formats should also be reported in the same way. For the new JPK_VAT structure, only the part requiring correction must be completed. The correcting document must include all transactional data for the period being adjusted, not just the data requiring correction.

From which VAT declaration periods does new JPK_VAT start?

The most recent guidance states the new report is required “by all registered as active taxpayers for the periods from 1 July 2020.”  It later reads “for periods from 1 July 2020, it will not be possible to submit VAT-7M and VAT-7K declarations and records other than in the form of the new JPK_VAT.”  These two statements indicate that the first mandatory new JPK_VAT submission will be the JPK_VAT7M for the month of July 2020, due no later than 25 August 2020.

The post Preparing for Poland’s New JPK_VAT Structure appeared first on Sovos.

This new 2020 reporting requirement by the Portuguese tax authorities was originally set to be introduced in February for the January 2020 stamp duty return.  It was first delayed until April 2020 with an obligation to submit three tax returns for the periods of January, February, and March 2020 by 20 April 2020. However, due to the current Covid-19 pandemic, implementation of the new reporting system has been postponed further with the January 2021 submission due in February 2021.

This delay should give insurers additional time to gather the mandatory information required by the new system to ensure they can fulfil the obligations to provide a complete and more accurate reporting.

Required information

In addition to information currently being requested, mandatory information required for successful submission of the returns will include:

• Territoriality: the exact location the risk has been issued from (i.e. within or outside Portugal)
• Insured Name (Tax ID): the policyholder’s tax ID
• Insured Country Code: the policyholder’s country code to which the tax ID belongs
• Location of the risk insured in Portugal: the postcode to which the contract relates to, due to the requirement by the Portuguese authorities to file the stamp duty on a provincial level, or at least whether the risk is located in Mainland Portugal, Azores or Madeira.

Challenges for insurers

One challenge insurers will face is obtaining tax IDs for policyholders not resident in Portugal. A possible solution to this would be to provide the Tax ID number of the country for which the policyholder is resident (e.g. VAT number) but further guidance has yet to be provided by local authorities on specific cases.

Another possible issue is the treatment of cancellations and reimbursements. Previously, the system allowed for inclusion of negatives in the current reporting return or offsetting refunds against future liabilities within a 12-month period. But this is set to change. A replacement return of the initial tax period where the policy has first been declared should be required with the new system, and refunds related to policies declared prior to 2021 may not be possible and may have to be written-off.

How Sovos can help

Sovos IPT is able to generate the relevant file which will be compatible for upload to the Portuguese reporting system.  Once the data provided has been thoroughly reviewed and includes all relevant mandatory information, it’s ready for upload to Sovos IPT software. Once the reporting system is opened by the Portuguese authorities, the submissions will begin. Due to uncertainties around the outcome from the reporting system, further modifications may be required based on discussions with the tax authorities.

With this new change, it’s clear that tax authorities are looking to minimise tax gaps by requesting information at a transactional level, on an ongoing monthly basis.  It won’t be long before other local tax authorities follow suit as the squeeze on budgets tightens.

Understanding and interpreting local tax rules can be challenging. With tax authorities globally becoming more demanding in terms of the data they collect and the frequency, it’s more important than ever for insurers to be aware of the changing requirements wherever they write business and to ensure they remain compliant. 

The post Portugal – New Stamp Duty Filing Requirements Delayed appeared first on Sovos.

PRO gives suppliers more control over timelines and registrations, allowing them to submit registrations on behalf of distributors. With this new flexibility, a supplier that is willing to front the cost and work with the distributor externally, can submit label registrations themselves. This reduces the potential of having to wait a month or more for the distributor to submit the label so they can move forward and begin selling their product sooner.

PRO’s impact on New York

New York’s Alcoholic Beverage Control (ABC) Law requires all brand labels for beer, low-alcohol wine, liquor, and hard cider products to be registered and approved by the State Liquor Authority (SLA) before they are brought to market. PRO will allow online submission and approval for state agencies, digitizing brand registrations and the renewal process for beer, cider, wine and spirits.

The NYSLA is one of the nation’s largest state liquor and alcohol regulatory agencies, currently managing more than 39,000 active brands, and is the largest such entity to fully automate its beverage alcohol product registration online via the PRO platform. PRO’s user-friendly compliance interface accelerates NYSLA’s brand registration processing, cutting down expected wait times from weeks to hours in many cases, while also reducing paper waste and shipping costs. 

Why go PRO?

With ShipCompliant PRO, users can submit applications, along with any state fees, for speedy review. Agencies can examine all application details within the PRO portal, leave comments and approve registrations without any paper or postage required. Sovos ShipCompliant retains all historical data for users securely in the cloud.

Many state alcohol agencies continue to rely on costly, confusing and time-consuming manual processes for alcohol beverage brand registration. Using the PRO system, can cut down on costs and time spent on brand registrations and licensed wholesalers, importers and retailers can get their products to market faster and more efficiently.

Learn more on how PRO streamlines brand registration workflows for beverage alcohol licensees and states alike.

The post How New York will Reduce Time & Costs for Suppliers, Distributors and State Agencies appeared first on Sovos.

1. Review procedures and document them: A lack of good audit trails and procedure documentation is commonplace in the world of unclaimed property. This adds disorganization to your compliance process and exposes your business to risk.

2. Use an automation tool: If you are trying to manage this manually, consider a web-based automation tool with compliance intelligence and comprehensive audit tracking capabilities. If you already have an automation tool in place, now is a great time to review those areas where manual work is still impacting your ability to effectively and efficiently manage the process. The less manual your process is, the better it is for you and your business.

3. Meet summer compliance deadlines: Several states have reports or due diligence requirements due throughout the summer months. Prepare your business to meet these deadlines.

4. Take inventory of dormant property: So many companies think unclaimed property simply takes the form of uncashed checks. The state statutes are much more comprehensive. Now is a good time to do your homework, review the types of properties that your organization could be holding and make sure you are reporting all property types.

5. Perform a cost benefit analysis: If you are managing this work internally, what is the cost? Would it make sense to consider unclaimed property automation software? Perhaps software could be a cost-effective way to maintain compliance.

Find out what Sovos unclaimed property compliance software can do for your business.

The post The Top 5 Ways to Stay Ahead of Unclaimed Property appeared first on Sovos.

A smart move

By making e-invoicing optional for B2B companies, the Finnish government has bypassed the need for a caveat from the EU Commission based on the VAT Directive. This would have been needed if e-invoicing for B2B transactions were to have been made mandatory. While the European Union’s strategy around the freedom of format requires the recipient’s acceptance to receive an e-invoice, Finland has tackled this from a different angle. Its aim is to increase B2B e-invoicing by turning this around and instead giving buyers the right to require that their suppliers provide e-invoices.

Freedom of format

The Finnish law still allows companies trading in Finland to leverage the freedom of format and ensure integrity and authenticity through any of the accepted methods. This would for example include the application of an electronic signature. On the other hand, the buyer’s right to ask for an e-invoice is limited to invoices issued following the European norm (EN 16931). There are currently two Finnish formats which correspond to the European standard: TEAPPSXML 3.0 and Finvoice 3.0.
The change in the Finnish e-invoicing regulation was introduced during the transposition of the EU Directive on e-invoicing in public procurement. Finland took advantage of the context and expanded the use of the European norm in B2B transactions, where the format is slowly gaining traction pushed by the mandatory use of the EU standard in B2G supplies.

Wider adoption of e-invoicing

This clever initiative by the Finnish government has the potential to increase the use and acceptance of e-invoices whilst also spreading the European standard. It creates opportunities for procure-to-pay solution strategies and for greater efficiencies for companies who operate with a high volume of unstructured invoices. As has been seen across the globe, e-invoicing presents opportunities for governments and companies alike as governments seek to close VAT gaps and companies look for operating efficiencies.

The post Finland Expands Adoption of E-Invoicing appeared first on Sovos.

For example, Title 6 of the Texas Property Code requires an individual or entity holding property to which it does not have legal claim (the “holder”) to turn that property (the “unclaimed property”) over to the rightful owners by July 1st each year. If the holder cannot locate the rightful owners, it must turn the unclaimed property over to the state comptroller.

In fact, all companies who fail to report and remit unclaimed property on time are assessed interest and penalties from the date the property should have been turned over until the date it is received by the state comptroller.

Fortunately, both penalties and interest can be waived by the comptroller if the holder enters a Voluntary Disclosure Agreement (VDA) and reports and remits the unclaimed property voluntarily. However, once the comptroller initiates an investigation, the holder is precluded from entering a VDA. Other state unclaimed property divisions have different rules and requirements to follow. Due to the complexity of complying with the ever-changing unclaimed property laws, leading businesses automate the compliance process with software.

Find out how Sovos unclaimed property compliance software can benefit your business.

The post The Danger of Unclaimed Property for Healthcare Providers appeared first on Sovos.

Many people enjoy wine, but don’t know a ton about it. They may have a basic understanding of what styles are out there or what they have liked in the past, but there is a great opportunity to teach and expose consumers to the vast world of wine culture. According to Conversioner, millennial consumers are 40 percent more likely to be influenced by impressive product descriptions that they see online. With education and additional information, consumers of all ages are more willing to get out of their comfort zone and purchase new and different varietals. 

In a time where you can find reviews, ratings, and top 10 lists for just about anything on the internet, having information readily available to consumers about your winery’s varietals on your ecommerce website can greatly improve overall customer experience and satisfaction. According to Sales Layer, six out of 10 shoppers point to poor product content as the main cause for leaving a shopping cart, besides price and delivery. Having this added information and elevated customer experience can help your winery standout from the multitude of options available.

After speaking with some of our clients, we’ve captured a few best practices on making a more educational ecommerce platform:

1. Give an overview and description of the varietal, in terms of where it is grown, the type of grapes it uses, and the tradition tasting notes or descriptions that are associated with the varietal. For example, if it’s a Cabernet Sauvignon, you might mention it traditionally has an opaque, full body with robust notes of black currant and berries. You could go on to mention when grown in moderate climates it has more herbal and floral notes, but when grown in warmer climates it has more notes of blackberry, chocolate or mint. You could give an example of some terminology people associate with this varietal: full-bodied, rich, spicy, fruity and smokey.  This is where you can get really specific on your wine offering, paint a full picture of the varietal and then describe how your wine fits within the larger frame. This is a great place to highlight what makes your wine special and different from the standard. You can describe details like vintage, aging, harvest dates.
2. Share tasting notes, level of dryness, mouth feel, aromas etc. Having a standard scale from most dry to least dry for every wine you sell, for example, could guide a consumer and help them narrow down their choices. Use taste descriptions like notes of blackberry or cocoa to give consumers a better idea of what the wine will be like. This can help you mirror the tasting room experience online.
3. Make customer reviews available for every wine you sell. People like to read reviews to help them make purchasing decisions online. According to Spiegel Research Center, consumers are 270 percent more likely to purchase an item if it has five or more reviews rather than if it has none.
4. Have suggestions readily available. For example, if a consumer is looking at one of your citrus-forward Sauvignon Blancs, you might suggest your Pinot Grigio as well, as it has notes of green apple. Small suggestions like this can go a long way to help the consumer get exactly what they are looking for. Another way of doing this is to share “ people have also viewed” as a way to give a tailored experience without getting too specific.
5. Suggest food pairings with each varietal. This is common practice in restaurants, and can easily be carried over in your ecommerce platform. For example, if a customer is looking at your oak-aged Chardonnay you could highlight common foods that accentuate the wine flavors, like light fish or chicken, buttery or creamy sauces, or fruits like peach, melon and mango. 

Adding some of these educational pieces will help the consumer feel informed and appreciated during the buying experience. This can improve customer satisfaction and foster a long-lasting relationship between the winery and consumer. Your winery’s ecommerce platform can not only be a place for consumers to purchase their favorite wines, but also a resource to explore and learn more about different varietals.

The post Foster Lasting Customer Relationships by Adding Education to Your Ecommerce Platform appeared first on Sovos.

Premium tax reporting

For reporting premium taxes, five regions make up the jurisdiction in Spain. Madrid controls the main or central administration of Spain and is by far the largest administration area. To the north of Spain four provinces make up the other regions namely, Alava, Guipuzcoa, Navarra and Vizcaya. Each region holds its own tax administration and has its own authority to control its tax collection. Premium tax returns need to be prepared and sent to each tax administration according to the relevant policy risk location.

Back in 2019, Consorcio introduced a radical new reporting requirement into the IPT world. This was the first of its kind and entailed replacing the old form-based submission method with a coded Data File upload to a portal. This portal then determined the tax payment, the declaration period for each transaction and any interest payments due. The portal and submission links directly to a bank account, meaning a direct debit payment transfers automatically as soon as Consorcio receives confirmation. This new approach benefits the tax authority enabling it to have faster, more accurate, and increased detail of policyholder information and it’s expected that other tax authorities will follow suit.

Fire Brigade Charge

The calculation of the Spanish Fire Brigade Charge brings its own challenges adding further complexity for tax teams at insurers. By the end of the calculation process it can take up to four years to declare fully one years’ worth of premiums. The process begins with a report in respect of property and fire insurance written in the preceding year. At the beginning of the following year the taxpayer then makes a prepayment based on the previously submitted report to determine the amount to be declared. In the following year, the taxpayer then submits a report with the actual premiums written during the previous year. Finally, in the next year, the difference between the prepayment and actual premiums written are confirmed and adjusted accordingly if there are any discrepancies. This can be in the form of an additional payment or a refund back to the taxpayer.

With Spain providing a challenge to any taxpayer trying to stay as compliant as possible, it’s key to understand the various taxes, reports and processes involved. The reporting of the Fire Brigade Charge is a lengthy process, the Consorcio’s Extraordinary Risk Surcharges reporting is new, and taxpayer’s systems need to prepare for when other tax authorities follow which they are expected to do. The four provinces add further challenges as taxpayers need to be aware of the location of their insurance risks and whether they are in these regions. It all adds up to be one of Europe’s most complex tax systems which is why local language expertise and a deep understanding of regulations is key to applying the correct rules and maintaining compliance.

The post Spain’s Tax System – The Complexities of Compliance appeared first on Sovos.

While the US economy was (until recently) chugging along strongly for many, several states were experiencing significant budget challenges and it’s likely the budget impact of the pandemic won’t be fully understood for several months. While the immediate impact of increasing unemployment benefit claims across the country is readily quantified, here in the US, we rely heavily on periodic (often monthly, sometimes quarterly or annually) business tax filings and payments. It’s no secret that projections made even just a few months ago will not be realized, but the actual tax revenue decrease is anybody’s guess.

Many US states have followed the federal government in deferring the deadline to pay income tax and have also offered businesses deferral options related to sales tax filing and remittances, extending through June. These deferrals often involving payment plans that could extend revenue collections out even further. Until those returns are filed, the full extent of the revenue shortfall will remain a mystery.

It’s worth it to take a moment to understand how this might compare to countries in Latin America and Europe who have either deployed or are contemplating continuous transaction controls. Countries where electronic invoices are sent to tax authorities in real (or near-real time) likely already have some understanding of the financial impact of COVID, even if they have offered significant deferrals of their periodic filing (VAT return) requirements.

While billions in federal stimulus money has been allocated to states under the CARES Act, these funds can only be spent meeting necessary expenditures related to COVID-19 that will be incurred from March 1 to December 30, 2020. The money cannot be used for any item addressed in the most recently approved state or local budget.

States are, of course, already speculating that the impact will be massive. California, who has spent the better part of the last few years amassing a $21B rainy-day fund, expects to run through their surplus quickly. Meanwhile, Rhode Island public officials are speculating that they are mere weeks away from running out of cash. With many stores closed and personal consumption at a virtual standstill, states like Florida which rely predominantly on sales tax revenue to fund their budget are likely to struggle.

While billions in federal stimulus money are being allocated to the states under the CARES Act, these funds can only be spent meeting necessary expenditures doe to COVID-19 incurred between March 1 and December 30, 2020 and cannot be used for any item addressed in the most recently approved budget.

In an earlier blog, we reported on the efforts of hero-manufacturers to meet our growing need for certain essential items such as ventilators, masks, sanitizers, gloves and face shields. What we said then remains true that the most important objective for companies stepping outside their normal product offerings is delivering these items to where they are critically needed. But, when you consider the possibility of significantly increased tax enforcement in a post-pandemic world to close what will be likely enormous budget gaps, the time is now for companies to start thinking getting your compliance house in order. Below is a checklist of some critical items.

• Evaluate your nexus profile. If your company is offering a telecommuting option, think about whether remote employees have created expanded physical nexus
• Likewise, if you have opened or expanded e-commerce channels, monitor your sales volume to see if you have passed any economic nexus thresholds
• If your compliance function is temporarily understaffed, monitor where you may defer filing and payment obligations without facing penalty or interest assessments
• Understand the taxability of what you sell – medical supplies, protective clothing, and sometimes even toilet paper, may be tax-exempt
• Understand your customers – if selling to hospitals, nursing homes, governments, or non-profits, maintain and keep any necessary exemption certificates

We are in unprecedented times. Never have we seen a strong economy purposely brought to a screeching halt. States had been counting on previously projected revenue to fund critical projects such as infrastructure, school construction and social programs. When all is said and done, we can count on the fact that they will be moving aggressively to recoup at least some of those losses through compliance enforcement. The question is, will you be ready when they do?

The post Thinking about a Post Pandemic Sales Tax Enforcement Landscape appeared first on Sovos.

1. Increases efficiency: Cloud-based workflow and file sharing applications help teams make real-time updates and provide full visibility of their collaborations.

2. Frees up IT resources: The beauty of cloud computing is that the servers are off-premise. Your solution partner takes care of them for you while rolling out regular software and security updates. This enables your IT staff to focus on revenue-generating projects to grow your business.

3. Shortens downtime time caused by disasters and outages: The Federal Emergency Management Agency (FEMA) stated that 40% of small businesses never reopen after a disaster, and many more fail within a year. Most companies that lose their information technology for nine days or more after a disaster file for bankruptcy within a year. And downtime comes in all shapes and sizes, including natural disasters, operational failures and human error.

Cloud-based services provide a backup and recovery solution that reduces downtime and offers offsite data backup resources. After moving to the cloud, IT managers no longer lose sleep worrying that a hardware failure or staff mistake will result in loss of data.

4. Reduces data center/infrastructure costs: Cloud solutions also eliminate the cost of hardware. And companies who use the cloud can reduce the size of their own data centers, or get rid of them altogether. The reduction in servers, software costs and staff can significantly reduce IT costs without impacting an organization’s IT capabilities. This provides an advantage over competitors.

With so many leading organizations moving their software to the cloud, experts say doing so is a competitive necessity.

Get in touch with one of our unclaimed property experts to find out how a cloud-based unclaimed property solution can benefit your business.

The post The Top 4 Benefits of a Cloud-based Unclaimed Property Solution appeared first on Sovos.

If you operate in Portugal, France or Spain, or are looking to expand your business into these European territories, we’ve compiled a quick guide covering key IPT developments in these countries.

Portugal

The most significant announcement is delay related.

Portugal was set to switch to a new digital filing system for Stamp Duty declaration this year. This has now been officially delayed until at least 2021 due to the coronavirus pandemic.

This may be frustrating for some, as many organisations will have worked tirelessly on the run up to the original deadline, digitising operations and putting systems in place, however this postponement provides some welcome extra breathing room to validate changes and to make any additional improvements needed to processes.

When the new system is eventually introduced, taxpayers will be required to provide detailed information on a transactional basis in order to issue their Stamp Duty return. With this new requirement on the horizon, it’s clear the Portuguese tax authorities are looking to tighten up reporting by requesting more granular detail. Understanding and interpreting local tax rules can be challenging – ensure your data collection processes match the requirements.

France

France is one of the most significant IPT collectors in Europe, with a 15% increase between 2014 and 2018. These increases have been due to sickness and legal expenses insurance contracts, and an increase in the contribution to the Common Fund for Victims of Terrorism.

Elsewhere, The Fonds de Garantie introduced two new annual contributions for companies writing “Dommages Ouvrage” in France after many insurance companies writing construction insurance went bankrupt.

The first one is a 5% contribution that applies to the difference of “Dommages Ouvrage” premiums written over the last 10 years, for which set coefficients and previous year’s technical provisions deductions are applied. The second one is a contribution whose rate can range from 0% to 12% and that is calculated on the total “Dommages Ouvrage” premiums written during the previous year. Its aim is to cover the charges incurred by the Fonds de Garantie on its activities related to Dommages Ouvrage.

Spain

Spain recently introduced a new software system for all of its compulsory surcharges such as Extraordinary Risk contributions and Environmental Damage surcharges.

The Consorcio de Compensación de Seguros (CCS) requires insurers to report their policy information on a more granular level. Insurers must provide information at a transactional level on an ongoing monthly basis for all surcharges now. The change has had a significant impact on the insurance industry and it’s taken some time for insurers to become accustomed to the new level of detail.

Spain’s approach could be adopted by other European nations in the future so our team of regulatory analysis experts will be keeping a close eye on developments – it will be interesting to see what can be learned from this new approach.

IPT generally

The current global situation is affecting some IPT tax filings, but economic effects are still coming through and there could be further changes in a short space of time.

Our team of regional IPT experts ensure our software is always kept up-to-date with the latest regulations and changes so you can be confident that your tax reporting and filing is correct. We also have a live updates blog to keep you informed.

The post What Cross-border Insurers Need to Know About French, Spanish and Portugese IPT appeared first on Sovos.

European Union

The European Commission has approved requests from all EU Member States to temporarily suspend VAT and customs duties on imported medical equipment.  This move is intended to ease the financial burden on the healthcare industry and applies retroactively from 30 January 2020 until 31 July 2021.  The European Commission noted that this measure may be extended if necessary after consultation with Member States.

Belgium

Certain periodic VAT return deadlines have been extended.  February 2020 returns are normally due on 20 March 2020; the deadline has been extended until 6 April 2020.  March 2020 returns are normally due on 20 March 2020; the deadline has been extended until 7 May 2020. 

Cyprus

Cyprus had previously announced that a temporary reduction of the VAT rates by which the standard VAT rate decreased from 19% to 17% for a period of 2 months and the reduced VAT rate decreased from 9% to 7% for a period of 3.5 months would take effect to provide relief for taxpayers.  This measure has since been withdrawn.

Greece

Payment of VAT due between 11-30 March 2020 has been suspended until 31 August 2020 for certain affected businesses.  Further, the following products are taxable at a 6% VAT rate (as opposed to 24%) until 31 December 2020: protective masks and gloves, antiseptic products, soap, and ethyl alcohol.  New go-live dates for the myDATA mandate have been published, starting from 1 June 2020 with a phased roll out.  Greece is expected to postpone the go-live date even further due to the ongoing pandemic crisis.

Hungary

The Hungarian Tax Authority announced that the deadline to implement mandatory real-time reporting version 2.0 XSD is postponed from 1 April 2020 to 1 July 2020.

Latvia

The State Revenue Service has announced that the reimbursement of overpaid VAT amounts will be issued within 30 days, a shorter period than the existing VAT law provides.

Luxembourg

The tax administration released guidance stating that a failure to file VAT returns within the deadlines will not result in any fines.  Additionally, VAT credit balances below €10,000 will be reimbursed.

Malta

The VAT payments for March and April 2020 may be postponed by taxpayers who have suffered a significant downturn in business without penalties or interest.

Netherlands

Tax authorities will automatically grant an extension of payment of 3 months once the taxpayer requests an extension.  Penalties are waived for late or non-payments once the above extension is requested.

Poland

Poland has deferred JPK_VAT V7M and V7K to 1 July 2020 for all taxpayers.

United Kingdom

VAT payments due from 20 March 2020 through to 30 June 2020 will be deferred.  This applies to all businesses, including non-established taxpayers.  Additionally, the HMRC has stated that the soft landing period for MTD digital links has been extended to 1 April 2021 for all taxpayers.

Sovos Global VAT Solutions

Sovos continues to closely monitor all global VAT developments, including those introduced in response to coronavirus.

The post Further EU VAT Measures in Response to Coronavirus appeared first on Sovos.

Taxes are addressed in a variety of ways throughout the bill, but the IRS has not released any specific guidance related to tax information reporting for these details. At this time, the IRS has only released limited guidance related to the payroll tax deferrals and offsets in the bill affecting Form 941 processing. The following are the top ways we believe Coronavirus and the CARES act are affecting your tax reporting obligations.

1. The IRS extended the filing due date for Forms 5498, 5498-QA, 5498-ESA and 5498-SA, which may conflict with IRA contributions. With Notice 2020-23, the IRS extended the deadline for custodians to issue the Form 5498 statement to recipients and to file with the IRS until July 15th. However, retirement plan owners also have until July 15th to make contributions to the IRA that can be attributed to 2019. So, if custodians issue the 5498 the same day, they can’t account for all of the contributions they receive. The IRS typically provides a 45-day gap between those dates. As a result, members of the reporting industry have requested a new 5498 filing due date of August 1st.

2. Coronavirus-related paid family leave (PFL) and sick leave (SL) payouts will likely cause a change on the W-2. PFL is not currently reported at the Federal level. And state PFL payments utilize the “other” box 14 of Form W-2 and a specific code. If the IRS sees PFL as a long-term deduction for the taxpayer, there may be a new box added to the form. Or, the IRS could use the box 14 and just add another code to delineate the Coronavirus-related PFL versus other PFL and other amounts reported in that box.

3. Payroll tax offsets for Coronavirus-related PFL and SL will impact Form 941. In order to pay for the Coronavirus-related leave, employers are to reduce their payroll tax liabilities by the applicable tax credits of the Coronavirus-related PFL and SL paid out. The IRS issued Notice 2020-21 to discuss how to manage this process. In short, it is an offset taken against the 941 payroll tax liability for the tax credit amounts applicable for the different PFL and SL scenarios. 

4. The employer’s share of payroll taxes have been deferred until December 31, 2020, which impacts Form 941. All employers are entitled to this deferral. They are required to pay 50 percent of the amounts deferred back to the IRS by December 31, 2021 and the remaining 50 percent by December 31 2022. Notice 2020-22 states that the employer will offset the 941 payroll tax liabilities reported by those amounts through the end of the year.

5. Loans from IRAs for COVID-19 are tax deferred, which may impact Forms 1099-R and 5498. Retirement plan owners can take a distribution of up to $100k to cover Coronavirus-related expenses. However, this will impact your ability to track loan amounts distributed. And it will impact the amount of Forms 1099-R you issue. What makes this more complicated is that the IRA owner can elect to be taxed for the distribution in one of the following two ways, which you will have to track and report accordingly: 

The owner pays the tax over 3-years. The IRS will likely add new boxes to the 1099-R form to report what was paid in one year versus what was taxable for that year. The Service will also likely create a new distribution code to indicate a Coronavirus-related distribution.

The distribution is treated like a loan and paid back. Distribution codes on the 1099-R will likely be updated to indicate a Coronavirus-related loan was taken from the plan. Codes will likely be added to report contributions received as paybacks of the COVID-19 loans for Form 5498 reporting.

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The post The Top 5 Ways Coronavirus is Affecting your Business’s Tax Reporting Obligations appeared first on Sovos.

Below are the top five challenges life insurers are facing in their first year reporting Forms 1099-LS and 1099-SB:

1. Determining what criteria necessitates Form 1099-SB
2. Receiving multiple Form 1099-LSs from varying companies for the same policy 
3. Receiving Form 1099-LSs with incorrect information
4. Form 1099-LS received through multiple locations internally
5. Lack of clarity on corrections and extensions for Forms 1099-LS and 1099-SB

Register for the free 1099-LS & SB webinar to learn how to overcome these challenges, with insight from leading tax professionals.

Reserve your spot for free today.

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The new timeline proposed in the draft decree is in line with the original date of implementation of the rules concerning the e-invoicing system envisaged in the Law on Tax Administration (Law No. 38/2019 / QH14). Interestingly enough, a later decree also issued in 2019 introduced a shorter timeline until go-live (namely November 2020), and the inconsistencies between the two frameworks made the private sector call for further clarifications on when this new obligation would indeed enter into force. The draft decree now awaiting ratification confirms the original plan of the go-live: July 2022.

Despite the formal extension of the deadline to adopt e-invoicing in Vietnam, agencies, organizations, and individuals are still encouraged to – voluntarily – apply the regulations on electronic invoices before 1 July 2022. In order to support voluntary adoption, the General Department of Taxation still needs to provide the required technical specifications for taxpayers in Vietnam to be able to successfully adopt an e-invoice system for their businesses as soon as possible.

The post Vietnam’s E-invoicing Mandate – Delayed Until 2022 appeared first on Sovos.