Lost In Transaction: The Cost Of Erroneous Tax Data

There is a big difference between managing direct taxes, such as corporate tax, and indirect taxes, such as sales tax and value added tax (VAT).

In recent years, the CJEU has shown more empathy towards taxpayers regarding the strict invoicing requirements and invoicing errors. When managing VAT on purchase transactions, it’s important to heed the advice of US President Ronald Reagan: “Trust, but verify.” Companies should check that purchase invoices meet all relevant tax rules rather than trust that the seller complied with the tax legislation.

Purchase invoices with missing data

Sales invoices with overcharged tax

Failure to issue invoices

Source: Forbes