Companies scramble to digitalize transactions as new laws loom
Regulatory pressures are beginning to force firms to innovate as tech developments make it ever easier for companies to keep digital records of various transactions – and providers are taking advantage.
By Anna Fedorova
One of the key areas where European governments are putting pressure on companies is taxation and invoicing, with the UK and Italy already taking steps to drive digitalization in this field.
In the UK, HM Revenue and Customs (HMRC) has embarked on the ‘making tax digital’ (MTD) campaign, which will mandate all businesses to use the government’s ‘MTD for business’ system from April 2019 to meet their VAT obligations.
There are a number of advantages to this initiative, which spans both business and individual taxation, according to HMRC.
Firstly, it will save customers time on providing the government with information it already has or can obtain from elsewhere, such as employers, banks, building societies and other government departments. Secondly, it can help prevent errors by allowing information relating to tax to be processed as close to real time as possible.
Thirdly, HMRC intends to make detailed financial information available through one digital account by 2020. Finally, new software will allow customers to interact with HMRC digitally at a convenient time.
Meanwhile, Italy is about to adopt a new law making e-invoicing obligatory for all business-to-business (B2B) and business-to-consumer (B2C) transactions from January 1, 2019.