real-time reporting – the sovos solution to sii
TRANSCRIPT
Real Time Reporting – The SOVOS Solution to SII
Background – Spain SII
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Background Spain Immediate Supply of Information (SII)
On October 20th, 2014 the tax authorities in Spain AEAT
launched a new VAT management system to (1) streamline
refunds, (2) provide taxpayers with accurate data for their
returns and (3) to conduct audits in a more effective manner.
On December 2nd, 2016 the Royal Decree 596/2016 was
approved and will enter into force July 1st, 2017. The new SII
will require companies to submit transactional data according to
government specifications on a real-time basis to the tax
authorities.
This marks a shift in the way in which the taxpayers interact with
the Tax Authorities by providing transactional information on a
real time basis following the trends of Brazil, Mexico, and Turkey.
80% of the
nation’s invoicing volume
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4 Who is affected?
The SII will be mandatory for all taxpayers that file monthly VAT returns. It is estimated that a group of
62,000 taxpayers with operations in Spain will have to implement this new system, including:
• Large companies with revenues equal to or greater than 6M euros annually
• Companies registered in the monthly VAT refund regime (REDEME)
• Entities forming part of a VAT group
Remaining VAT taxpayers may voluntarily use the system. In order to do this they must contact the AEAT
and file the proper paper work.
80% of Spain’s Invoice
Volume Affected
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5 What Information must be submitted real time
• VAT books of invoices issued
• VAT books of invoices received
• VAT books of intra-EU operations
• VAT books of investment goods
“With Real-Time Invoice data Governments can calculate your
remittance for you eliminating errors & fraud”
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6 Business Impact of Spain SII
Real Time Exchange
• Registration no later than 4 days after Invoice creation
• All filing for tax period by 16th of following month
Technical Penalties
• 0.5% of Invoice amount for delayed filings and 1% for failure to maintain according to government standards
• Up to 24,000 Euro a year for technical issues
Penalty for Mistakes
• 1% of Invoice amount for mistakes or omissions.
• Spain triangulating data –comparing your deductions with your suppliers registrations
• Delay in refunds for VAT credit, especially for REDEME tax regime
IT Project
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7 Business Impact of Spain SII
1. Pre Filing Fiscal Reports: with all invoices being reported to the government in real-time, the government has all of the information to file reports on your behalf eliminating VAT fraud.
2. Data Triangulation: By the government having both the supplier and clients sales and purchases, the tax authorities will be able to link reports and detect any discrepancies.
“Tax agencies are using automation to maximize tax collections and eliminate VAT fraud”
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8 The “Silver Lining” – Business Advantages
• No longer necessary to submit forms • 340 – Annual VAT Summary
• 347 – Annual summary of Transactions with 3rd parties
• 390 – Tax payer under monthly VAT refunds
• Ability to obtain the VAT refund faster (also why companies may want to volunteer)
• Greater detail about operations
• Improve the way of carrying the traditional VAT Registration Books
• Decrease information requirements from the AEAT & eliminate inquires which were mainly transactional requests
• Ability to self audit and decrease potential fines
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9 When will the new SII apply?
Pilot phase: January – July 2017
Go live: July 1, 2017 for mandated/volunteer taxpayers
What happens to the information for the first half of 2017?
Must be sent to the AEAT between July 1 and December 31, 2017
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10 Modification in the LAW – Spain SII
• Article 164 #4 – Carry accounting records established in the form defined by the government and accounting standards.
• Article 200 #1 & 3 - Tax violation for breach of accounting and registration obligations.
• Article 200 #1 - Delay in bookkeeping and updating accounting records at the AEAT’s electronic site.
• Regulation on VAT article 62- carrying the books electronically and the deadline submission to tax authorities.
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11 Solution Requirements – Spain SII
• XML messages electronically submitted via Web Services that require gov’t approved certificates
• The XML message sent by the companies contains all invoice data, identified with a unique identifier. The maximum invoices sent in a package is 10,000 .
• Synchronous web services
• The AEAT will automatically make validations (XML Schema and then Business Validations)• If error, the AEAT will send details of error in a web service response message
• Once XML Schema validated, web service proceeds to process Business Validations• AEAT responds with message of acceptance or rejected
• Accepted, rejected, accepted with repairs – based on validations
• Must correct the invoices that were sent with errors • There are cancellations and modifications allowed to registered documents
• In the response from AEAT there will also be a verification code (CSV) that will serve as record of submission. Except if all invoices are rejected
• There will be a global response per book (i.e. report filed) and a single response per line item (i.e. invoice transaction)
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12 Example of Transactional Detail in Gov’t Portal
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13 Solution Requirements
Regulatory Analysis• Maintain updates with government agencies AND turn legislation into nimble software solutions
• Static Reports eliminated: 340, 347, 390
• 5 Transactional Integrations Added:
• Sales, Purchase, Cobros en Metalico, Operaciones Intracomunitarias, Bienes de Inversion
Real-Time Transactional Expertise• Spain SII is a transactional system, penalties are per invoice and triggered by technical and data issues
• XML file does not have Digital Signature, however, certificate file is need for Web services communication
Control and Visibility to Avoid Penalties• All relevant information, documentation, workflow and history available at one controlled location
• User can change data and resubmit transactions to AEAT
Scalable vs. Point Solution• A platform to simplify Tax Compliance and Business-to- Government Reporting globally as more and
more government turn to transactional data to trigger audits and monitor collections
Sovos Solution Options –Spain SII
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15 Option 1 – SFTP Transmission
• In order to facilitate automated transmission of data to the solution, we allow for the specification of
an FTP server. This transmission must be done via SFTP (SSH File Transfer Protocol) to ensure
security.
• This server must be accessible to both the client system and the Sovos system.
• Using import profiles configured in the Sovos VAT Platform, we will automatically pull and consume
files from the FTP server. Once processed, any transactions included in the file will be batched and
transmitted to the SII system.
• Optionally, the Sovos VAT Platform can be configured to place flat files back on the FTP server when
acknowledgements/rejections are received.
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16 Option 2 – API Connection
• Direct connection with the platform is available via RESTful JSON API.
• Once the transactions are sent to the Sovos VAT Platform, they will be batched and transmitted to
the SII system.
• Although there is no push of data from the Sovos VAT Platform API back to the calling system,
updates can be queried for.
Endpoints
• POST, GET, PUT /transactions
• Used to send/update/query for transactions that are currently in the Sovos VAT Platform
• GET, PUT /notifications
• Used to pull acknowledgements/rejections that may have occurred in the workflow.
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17 Option 3 – SAP integrated flow (RTC)
1 - Link: The process begins by “loading” any document related
to the SAP Management console. Users specify the criteria from
SAP where this information is located.
2 - Extractor: Once the job is triggered, the extractor pick up the
data from the SAP tables pre-defined by the functional
specifications. The extract programs will pull information out of
SAP in order to send to VAT Cloud Server.
3 - Transformation: VAT Cloud Server will transform this
information into the appropriate SII format.
4 & 5 - Submission: Cloud server will send the files to the web
services provided by the government. Government will reply with
the approval/rejection/error.
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18 Option 3 - SAP integrated flow (RTC)
The SOVOS Reporting Solution for SAP consists of linking, extraction and monitoring
components that run within the Customer’s existing SAP system landscape. The Management
Console tracks the history and provides audit details on each extraction run, including
information on file location, time of extract, user, etc. The E-Report tables store parsed subset of
outbound transactions available from the SOVOS operational solution within the customer’s
environment. The extractor reflects information from the Customer’s general ledger, summarizing
according to the SII groupings defined in master data and incorporating relevant values for sales
and purchase transactions where needed.
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19 Option 4 – Manual Upload
• Manual file upload is also possible via the Sovos web portal. Once processed, any transaction
included in the file uploaded will be batched and transmitted to the SII system.
• A flat file can be exported out of the system with updated acknowledgements/rejections.
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20 Option 5 – Combination of options 1-4
Integration Sovos VAT reporting
(Cloud)
AEAT (Endpoints)
SAP RTC
File Upload
FTP/SFTP
XML Mapping
XML Validation
AEAT
Communication
API
Submition MethodsSuministroLRFacturasRecibidasAnulacionLRFacturasRecibidasSuministroLRBienesInversionAnulacionLRBienesInversion
SuministroLRDetOperacionIntracomunitariaAnulacionLRDetOperacionIntracomunitaria
SuministroLRCobrosEmitidasSuministroLRCobrosMetalicoAnulacionLRCobrosMetalico
SuministroLRFacturasEmitidasAnulacionLRFacturasEmitidasSuministroLRPagosRecibidas
Response MethodsConsultaLRFacturasRecibidas
ConsultaLRBienesInversionConsultaLRDetOperacionIntracomunitaria
ConsultaLRCobrosEmitidasConsultaLRCobrosMetalico
ConsultaLRFacturasEmitidasConsultaLRPagosRecibidas
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21 Import profiles
• Import profiles: If choosing an implementation path that includes flat files, we will specify
import profiles that provide how to map values into known Sovos VAT Reporting fields.
• Mapping: based on an input document, we will map any required columns from the document
to the known fields in the Sovos VAT Reporting Platform.
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22 Data Accuracy Rules
• In addition to facilitating the mappings, import profiles also
allow for Data Accuracy Rules to be applied.
• These rules use a filter condition to apply logic to
transactional data - either to correct data or populate data
with reasonable defaults.
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23 Additional Fiscal Filings
• SII replaces most, but not all, fiscal reporting requirements
• For those other requirements in Spain (and throughout the EU), the system provides a filing workflow tool
• Commenting
• Document upload
• Robust auditing/assignee features
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24 Notification Monitor & Automatic Transmission
Notification Monitor
• Granular notification
• Individual audits for data manipulation
• Notification inbox
• Allows for explicit action of “reading” the notifications
Automatic Transmission:
• Each day, automatic transmission is handled to Spain of the previous day’s transactions
• If information is updated/added/removed, transactions will be re-transmitted to Spain
automatically
• Notification monitor will allow transmission/extraction of details back to source system
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25 Sovos Compliance – Spain SII Solution Benefits
• Ensure accurate tax reporting and IVA credits
• Facilitate complete audit trails
• Avoid tax penalties, identify missed deductions
• Lower cost of closing books monthly & gain extended time to file (10 additional days)
• Lower IT costs through end to end solution with Sovos maintenance & administration
Contact Details
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27 Your SOVOS contacts
Paul Sanders
Enterprise manager UK & IE
Sovos Compliance – London, United Kingdom
Casper Winkelman
General Manager Europe
Sovos Compliance – Amsterdam, the Netherlands
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An ally capable of responding to
new tax and reporting obligations
you don’t yet see coming.
Confidence that your business is
running on the most complete and
accurate regulatory analysis.
Visibility into and control of the data
you need across a patchwork of
systems.
Local knowledge combined with
global support to help you wherever
your business operates.