The Digitisation of Tax, or Making Tax Digital, is an initiative being introduced by many governments around the world, with a message that change is designed to make it easier for both individuals and businesses to get tax right and keep on top of their affairs. The backdrop – each year, the world’s economies are losing billions to tax avoidance and taxation errors. A recent report by the International Monetary Fund (IMF) reported it as an estimated $600 billion loss.
In 2003, the European Union (EU) introduced legislation to tax the digital exchange of value. The resulting taxation required non-EU headquartered businesses that provide digital services to consumers in EU member states to register in the VAT system and to charge VAT based on customer location.
Why does my organisation need to care?
Organisations will need to identify vendors and solutions that can support them as local, regional and global tax administration changes introduce an array of new challenges.