Finland and Estonia live VAT data exchange
- Aug 31, 2021 | Avalara
The Finnish and Estonian tax offices, the Verohallinto and Estonian Tax and Customs Board, respectively, have started exchanging in real-time Value Added Tax transactional data. This will increase the pressure on cross-border traders to think about their live VAT determination, and if it needs supplementing with real-time determination.
The data is passed via the two countries’ X-Road platform which had already been used for personal income tax information exchange between the two. This has now been extended to VAT, in particular to support traders working between the two states, and to help the tax authorities quickly identify VAT frauds which tend to launch and close much faster than other traditional data tracking processes (e.g. Intrastat) have been able to keep up with.
EU member states are considering developing a harmonised transactional reporting regime, including potentially a standard e-invoicing system.
Other EU member states have developed a Transaction Network Analysis tool to help identify cross-border missing trader fraud. It includes building connectors between member states’ tax IT platforms to share transaction data and reporting in near real time. It monitors deviations in purchases and sales between vendors and purchasers, and other discrepancies between disclosures in the return.
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