Continuous Transaction Control: The Global Shift in Tax Management
Posted: Tue Jan 07, 2025 6:44 am
EESPA (the European E-invoicing Service Providers Association) defines Continuous Transaction Control as a form of reporting or settlement based on transactions, on invoices actually issued or on a subset of the invoice.
In other words, Continuous Transaction Control is a digital tool developed and adopted by some states that makes the fight against fraud and tax evasion more effective and reduces the gap in the calculation of VAT during invoicing.
Continuous Transaction Control, however, is only the “last mile” of a path honduras whatsapp resource that many countries have undertaken for some time to make the control of national and international transactions more efficient and prevent fraudulent behavior during invoicing or tax returns.
In fact, this tax control activity has always been subject to structural problems, so to speak.
Moreover, as it is traditionally conceived, the tax monitoring and assessment mechanism puts the control authorities in a difficult position, since the regularity of the transactions can only be verified ex post , since it is necessary to wait for the taxpayer's report before being able to move in one way or another.
This is a problem from many points of view. First of all, taking action “late” means that authorities have to use more resources to recover relevant information by reconstructing movements and operations dating back over time.
Secondly, audits can often depend on the reporting done by the taxpayers themselves, whose reports are naturally limited, covering only a given period and, therefore, they place on the authorities themselves a “boundary” of audit that is not easy to extend by requesting documents that are not always available.
Finally, such a setting makes prevention very difficult and limits the intervention of the authorities to a subsequent verification and possibly to a sanctioning activity.
To overcome all these “problems”, the authorities themselves have undertaken (as it was said) a path of innovation that has led to the adoption of some digital solutions that have soon become shared.
Consider, for example, the imposition of the obligation of electronic invoicing , which after a process that began with the legislative decree 127/2015 in implementation of the delegation law for tax reform, has finally been introduced in Italy, first for transactions made towards the Public Administration and later also for those between private individuals.
In other words, Continuous Transaction Control is a digital tool developed and adopted by some states that makes the fight against fraud and tax evasion more effective and reduces the gap in the calculation of VAT during invoicing.
Continuous Transaction Control, however, is only the “last mile” of a path honduras whatsapp resource that many countries have undertaken for some time to make the control of national and international transactions more efficient and prevent fraudulent behavior during invoicing or tax returns.
In fact, this tax control activity has always been subject to structural problems, so to speak.
Moreover, as it is traditionally conceived, the tax monitoring and assessment mechanism puts the control authorities in a difficult position, since the regularity of the transactions can only be verified ex post , since it is necessary to wait for the taxpayer's report before being able to move in one way or another.
This is a problem from many points of view. First of all, taking action “late” means that authorities have to use more resources to recover relevant information by reconstructing movements and operations dating back over time.
Secondly, audits can often depend on the reporting done by the taxpayers themselves, whose reports are naturally limited, covering only a given period and, therefore, they place on the authorities themselves a “boundary” of audit that is not easy to extend by requesting documents that are not always available.
Finally, such a setting makes prevention very difficult and limits the intervention of the authorities to a subsequent verification and possibly to a sanctioning activity.
To overcome all these “problems”, the authorities themselves have undertaken (as it was said) a path of innovation that has led to the adoption of some digital solutions that have soon become shared.
Consider, for example, the imposition of the obligation of electronic invoicing , which after a process that began with the legislative decree 127/2015 in implementation of the delegation law for tax reform, has finally been introduced in Italy, first for transactions made towards the Public Administration and later also for those between private individuals.