Tax Compliance Features

Is global indirect tax compliance having a SOC-2 moment? I think it very well could be... There are several macro themes in this space that we need to consider: 🌏 Businesses are going global earlier and earlier: this means they have to deal with cross border transactions and indirect tax compliance at an earlier stage when they don't have the right infrastructure and resources to do so. 📜 Indirect tax regulation is evolving: COVID-19 depleted international governments funds and a major way to recoup this has been through cracking down on international transaction taxation. Various jurisdictions are especially focused on cross border technology/e-commerce sales (e.g. as of April 1 2024, payment processors, like Stripe, have to report companies to the EU commission who have more than 25 transactions / quarter in the EU, regardless of whether they are registered for VAT or not: https://bit.ly/3yslgsB). That means a lot of US companies selling into the EU are going to start getting notices from tax authorities! ✨ AI can automate compliance operations: to date, the indirect tax sector has been fraught with manual processes. A fragmented market of tax lawyers and accountants comb through legislation manually, which is costly and prone to error. There are obviously some processes (that usually require interpreting parts of the law that are ambiguous) which are not so easy to replace with software. But there are many workflows that can be vastly improved and largely automated with AI. E.g. helping determine whether products are taxable vs non taxable across various jurisdictions; collecting and monitoring unstructured tax rate data across the web - all tasks well suited to LLMs. All this to say, that indirect tax is becoming something that's harder to ignore for modern global companies. In many ways, it feels a little bit like the SOC-2 moment for startups. Prior to companies like Vanta, startups never really thought of certifications like SOC-2. Now it's a 'need to have' if you want to sell to enterprise. We believe we're going to see a similar movement with indirect tax compliance as governments clamp down on cross border transactions from fast growing software and AI companies. 

New Tax Reporting Requirements in Zambia and what to look out for; Businesses in Zambia today are facing a significant regulatory shift. The Zambia Revenue Authority (ZRA) now requires that companies report detailed business information through the ZRA Smart Invoice system. This includes comprehensive sales invoice data, sales figures, stock levels, and procurement details. Compliance with these new requirements is crucial for businesses operating in Zambia, ensuring transparency and streamlined tax administration. Key features of the Smart Invoice system: Real-time data transmission: Invoices will be sent directly to the ZRA as they are generated, ensuring timely tax reporting. Fiscal signature and QR code: Each invoice is digitally signed with a unique identifier to verify authenticity and prevent fraudulent invoices. Stock management integration: The system allows businesses to manage their inventory alongside their invoicing, providing greater transparency. Reduced administrative burden: By automating invoice generation and submission, businesses can significantly reduce manual data entry and associated errors. Compliance enforcement: The ZRA can monitor invoice data in real-time, facilitating better tax compliance checks. We eagerly look forward to the fundamental difference the new system will make in our tax administration.

FTA Requests Post-Filing Clarifications on Corporate Tax Returns The Federal Tax Authority (FTA) has started issuing clarification requests after Corporate Tax return submissions, seeking additional details and supporting documents to verify the accuracy of filed information. Recent FTA requests have included: 🔹 Corporate structure showing all branches and locations 🔹 Justification for unaudited financial statements or missing comparative figures 🔹 Full trial balance (with opening, movement & closing balances) 🔹 Detailed account ledgers reconciling with the trial balance 🔹 Employee list with names, salaries, and benefits (with proof) 🔹 Sales reports by project with cost and profit margins 🔹 Bank statements for the relevant year 🔹 Connected person disclosure 💡 Key takeaway: Submitting your Corporate Tax return is not the end of compliance — it’s just the beginning. Be prepared to: ✅ Maintain organized, reconciled, and auditable records ✅ Ensure financial statements and ledgers align with filed returns ✅ Keep supporting schedules and justifications ready for review ✅ Respond promptly and accurately to any FTA request The FTA’s recent actions reinforce the importance of continuous compliance, robust internal controls, and detailed record-keeping beyond filing deadlines. Now is the time for businesses to: 🔸 Strengthen documentation practices 🔸 Review internal accounting processes 🔸 Ensure readiness for any post-filing FTA clarification Compliance is not a one-time task — it’s an ongoing commitment to transparency and accuracy. Kiritharan Shanmugarajah #UAE #CorporateTax #FTA #TaxCompliance #TaxAudit #FinanceUAE #TaxUpdate #CorporateGovernance #TaxConsulting #CorporateTaxUAE

Tax compliance is shaped not just by rules but by behavioral, emotional, and social factors, making it essential to understand taxpayers’ psychological experiences to design more effective and trusted tax systems. Jonathan Karver's The World Bank World Bank Development Economics blog provides an overview of a new “Behavioral Taxpert’s Toolkit” from the World Bank’s Mind, Behavior, and Development Unit (eMBeD) and explains three essential tools: 1️⃣ Nudge: Make compliance easier by simplifying procedures, using reminders, and appealing to social norms to encourage voluntary tax payment. 2️⃣ Budge: Adjust incentives and enforcement, such as audits or penalties, to deter evasion and reinforce compliance. 3️⃣ Trudge: Recognize and address deeper barriers like mistrust, fear, or confusion through taxpayer education, better communication, and institutional reform. 📗 Blog: https://lnkd.in/gmYQviNW 📘 Policy note: https://lnkd.in/g-8sQXxe 📙 Practitioner’s guide: https://lnkd.in/grwNpvgy