Tackling global tax compliance with Tradeshift (3 of 3)
The first 2 parts of our 3 part series touched on the logistics and specifics of e-invoicing compliance. In our final part, we shift our focus to the topic of tax compliance and the various challenges working professionals face when working to achieve compliance across a variety of countries.
Enabling global tax compliance
Tax compliance is much less straightforward than e-invoicing compliance. As a result, ensuring that transactions are conducted compliantly requires additional levels of review from customers and suppliers. Compared to e-invoicing requirements, tax compliance requirements differ more across countries. Because of this, the specific methodology for ensuring tax compliance will vary depending on which country you are operating in.
Interoperability and tax compliance
The Tradeshift platform supports interoperability when it comes to the exchange of business documents between buyers and sellers. To achieve this interoperability, we work alongside several other e-invoicing and B2B networks such as Nemhandel, EESPA, and PEPPOL.
- Nemhandel — Nemhandel is a Danish network and was the original model for PEPPOL. On a national level, it became successful when, in 2005, OIOXML electronic invoice was mandated by law in Denmark. As a result, it is a standard infrastructure for submitting electronic invoices in Denmark.
- EESPA (European e-Invoicing Service Providers Association) — membership for EESPA has led to several integrations with other service providers, enabling them to upload invoices on behalf of their customers to Tradeshift customers.
- PEPPOL — the PEPPOL network is by far the most significant global infrastructure for exchanging business documents. We will dive deeper into PEPPOL later in this article.
The Tradeshift platform enables the exchange of documents with more than 150 other service providers within these networks based on bilateral or multilateral agreements. Interoperability frameworks governed by national or international standardization organizations set the scene for this cooperation. Everyone involved in the transactions benefits from this collaborative effort by saving time and effort setting up electronic document exchanges.
What is PEPPOL?
PEPPOL is an infrastructure and a network for exchanging electronic business documents relating to e-commerce and e-procurement. Primarily, PEPPOL is used between public sector organizations and their suppliers. Created in 2008 as an EU project by the European Commission, the aim was to facilitate the development of e-commerce in Europe. Later, it evolved into a global network of service providers and national government authorities, forming the non-profit “OpenPEPPOL” organization under Belgian law. PEPPOL is in use in 31 countries in Europe plus Australia, Canada, New Zealand, Singapore, South Africa, and the United States. OpenPEPPOL has Certified Access Points in 29 European countries plus Australia, Canada, New Zealand, Singapore, and the USA.
What is PEPPOL at Tradeshift?
Tradeshift is one of the founding members of the OpenPEPPOL organization and uses its artifacts and specifications to enable cross-border e-procurement and e-invoicing. Under the terms of interoperability, Tradeshift, as a PEPPOL AccessPoint, supports customers to receive invoices from fully onboarded and integrated suppliers as well as via the PEPPOL network. Our connection to the PEPPOL network allows anyone with an authorized PEPPOL service provider to send invoices right away.
It is still recommended for suppliers to onboard through our Tradeshift platform when sending invoices via PEPPOL. Buyers can strengthen their AP automation and matching capabilities when they require suppliers to maintain a Tradeshift platform account. Suppliers benefit from being onboarded to our Tradeshift platform with access to features such as invoice updates, early payment programs, and other collaboration features. For further information on cases and document exchange types that the PEPPOL and Tradeshift network support, contact a Tradeshift representative. For up-to-date information and full details on the PEPPOL offerings, refer to the official PEPPOL page.
So, what is the best tool you can use to help ensure a smooth and efficient tax compliance process?
Tradeshift’s network and digital software solutions help to provide the support and tools you need for your organization to remain compliant. With Tradeshift Pay, our document validations feature helps keep you and your partners up to date on the latest country checklists and best practices. You can rest assured that we’ve got your back, wherever you choose to do business.
Utilizing country profiles
Another great feature of Tradeshift Pay’s tax compliance capabilities is the “country profiles.” Country profiles work to modify our Tradeshift Pay service according to the specific requirements of various countries. Among the modifications that are possible through country profiles is the creation of specific fields in invoices, the validation of legal and tax identifiers, and the list of default taxes that are provided to users of the web UI.
With document validations and country profiles, buyers can enforce mandatory content on a country-by-country basis. However, some things cannot be validated through document validations such as whether the tax amount applied to a certain line is correct on the basis of the type of good or service being sold . In these situations, Tradeshift provides a list of default taxes and can create additional, customized taxes. Still, ultimately, it is the supplier’s responsibility to apply the correct tax to their invoices.
Currently, our Tradeshift solutions are translated into 21 languages which are also available as user languages on the Tradeshift WebUI. For a full, updated list of our language capabilities, reach out to your Tradeshift representative. As a software solution built for adaptability, Tradeshift prides itself on staying flexible in the face of tax compliance and regulation changes. We aim to support your specific needs and help to create a more seamless and efficient compliance process.
Tradeshift’s compliance coverage
As previously explained, e-Invoicing and tax compliance is a complex area that is best approached individually on a per-country basis.
While Tradeshift’s services can be used globally (except in countries under government embargo or where other legal or local restrictions apply), our features are best used to proactively address complaint e-invoicing in specific countries. Within the core Tradeshift Pay subscription, certain countries are addressed. In addition, other countries may require the purchase of a Tradeshift Pay – Compliance subscription package. For more detailed information about whether your country requires a compliance subscription pack, reach out to your Tradeshift representative.
For a full list of the countries where Tradeshift has actively addressed electronic invoicing and tax compliance in some manner, please refer to this web page that is regularly maintained.
It may seem like a lot of information to digest, but tax compliance doesn’t need to overwhelm you and your team. The key to ensuring compliance lies in relying on tools and resources that are built to help your processes adapt as regulations change. As global trade expands and consumer demands rise, having a system in place to ensure you remain compliant will give you peace of mind and help you to create a resilient business operation.
Tradeshift takes pride in our ability to offer a flexible and modern solution to your organization’s needs. With a platform of digital software tools you can use to strengthen your AP, supplier relations, and invoice processing, our Tradeshift network is built to support you where you need it most. Looking for more information about tax compliance or our Tradeshift platform?
Our support team is always ready to help answer any questions you may have! Reach out to our team today and start making shift happen in your organization.
Check out the other parts of our compliance series:
