Tieto and the Federation of Finnish Financial Services have presented an initiative on digitalized value-added tax (VAT) reporting. The new standard would allow companies to report VAT information faster and facilitate real-time reporting. Adopting a uniform standard could help to increase European tax revenues by up to EUR 160 billion a year.
The new ISO 20022 standard devised and developed by Tieto and the Federation of Finnish Financial Services will help to enable real-time value added tax (VAT) reporting. The standard allows the necessary information in each invoice to be reported to the tax authorities in digital form. Adopting the new standard across Europe could potentially increase tax revenues by up to EUR 160 billion through the collection of currently unreported VAT.
- Digitalization is the best weapon for combatting the shadow economy. The newly published standard for easy VAT reporting will help to advance the transition towards electronic invoicing in Europe. It will also lighten the burden of reporting carried by the companies by means of automatization and real-time reporting. We are proud to have been able to contribute to the fight against the shadow economy by offering efficient new digital tools for companies and organizations, says Kimmo Hannus, Head of Business Integration Brokerage at Tieto.
- Tieto is actively involved in the ecosystems of the financial sector. Together with the Federation of Finnish Financial Services, we played an active role in the specification work related to the new standard. We have also collaborated closely with the tax authorities to establish common ground rules, Hannus continues.
- The implementation of the new standard will promote uniform VAT collection policies across Europe. The VAT deficit does not constitute a large problem in Finland. For Finnish companies, the most significant aspect is that implementing real-time VAT reporting at the European level would provide for a fairer competitive environment, says Pirjo Ilola, Head of Payments Standardisation and E-invoicing at the Federation of Finnish Financial Services.
Pirjo Ilola notes that this new standard represents the third time the Federation of Finnish Financial Services has contributed to the creation of an ISO standard.
Both Tieto and the Federation of Finnish Financial Services hope for fast and extensive adoption of the standard by the tax authorities, public sector and companies, so that its benefits can be claimed as quickly as possible. The standard is available free of charge on the ISO 20022 website.
Tieto is active in promoting digitalization in Finland and the development of the financial sector ecosystem. Among other things, Tieto has developed and implemented the Siirto payment platform, Finland's first real-time multi-banking platform for mobile payments. The company has also been strongly involved in advancing the digitalization of cash and card payment receipts as part of the TARU project.