E-archiving for VAT: Compliance in a Digital World

Compliant archiving of original invoices and similar tax-relevant documents has long been overlooked. As companies gradually made the move to digitize existing paper processes, invoicing became a prime area for transformation into e-invoicing. However, requirements for long-term electronic archiving in traditional tax law were not always adapted in time to reflect the specific challenges of the digital age. Where such modernization was nonetheless attempted, tax administrations often lacked the experience to provide detailed best practice guidance. These circumstances led taxpayers in many countries to – without much prior thought – gradually begin exchanging binders of original paper invoices for a generic type of electronic storage, without necessarily investing in strong safeguards fit for tax audit purposes. As companies continued to digitize their commercial workflows and trading partner communications, tax administrations feared the emergence of an auditability deficit that would allow an already-considerable VAT gap to grow to unmanageable proportions.

Source: SOVOS

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