- Brazil is implementing a split payment VAT system where VAT is automatically withheld during electronic payments and sent directly to tax authorities.
- The system aims to reduce fraud, payment delays, and cash-flow manipulation by enabling real-time VAT settlement and granting credits only after payment.
- It leverages Brazil’s advanced e-invoicing and banking infrastructure for seamless integration and transparency.
- The reform seeks to close the VAT gap, combat tax fraud, and lower compliance costs for businesses.
- If successful, this system could serve as a global model for modern VAT collection.
Source: fiscal-requirements.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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