- Usage-based billing is now common for AI and SaaS, aligning pricing with actual consumption.
- This model shifts VAT risk to areas outside traditional tax team control, mainly due to system design, timing, and data flow issues.
- Key challenges include handling free usage, prepayments, and unused credits, which often cause VAT compliance problems.
- The main risk is assuming billing systems handle VAT correctly, when in reality, system design often fails to reflect VAT rules.
- Differences between accounting and VAT treatment of credits create reconciliation gaps and potential disputes with tax authorities.
Source: news.bloombergtax.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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