![]() These are all good reasons why European governments are looking to benefit from the clearance model. It will eliminate customs documentation because all transactions are accounted for in their systems. has closed the VAT gap* by 21% (as a percentage of Mexico’s annual budget)Īs well, Mexico and Brazil are creating an interchange format between their clearance systems.has increased tax collection revenues by over 30%. ![]() handles over 10 billion electronic invoices every year.Every tax paying entity earning more than $12,500 USD has to report their transactions through the government’s clearance model infrastructure. In the Americas, Mexico is having extraordinary success with its clearance model, mandatory for B2G as well as B2B. Companies are responsible for invoice integrity, authenticity and archiving, and key invoice data has to be provided in electronic formats. Government tax administrations require that each invoice is reported to them either before or during the exchange. The problem with the post audit model is tax evasion, which is one of the reasons countries in Asia, Latin America and Europe have moved to the clearance model. Tax audits may happen years after the actual business transaction has occurred. In countries with the VAT system, the invoice is the document that provides evidence for tax compliance. Partners are responsible for providing an accessible archive and reporting for up to 10 years after the initial document was created. Trading partners have a free exchange of invoices. There are two types of tax compliance reporting: Post-Audit Approach
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