As a means to increase revenue and finance subsidies (e.g. furlough schemes), tax authorities are ramping up efforts to review levels of compliance from digital companies. One of the main targets of this review are business-to-business (B2B) digital companies.
In the past, a B2B digital company with global sales would be under the impression that it had fewer VAT obligations to meet as the VAT would, generally, be accounted for via the reverse charge by its business clients.
This impression is far from reality. Today, these companies are likely going to be the specific targets of new legislation and increased audits. Why? Well, with the aforementioned need to generate more revenue to cover for the impact of the pandemic on government accounts, the authorities perceive such companies to have benefited financially from the crisis.
Source: taxamo.com
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