5 things to know for a transit from one tax service to another

Sometimes you need to change one tax reporting provider to another. You may be dissatisfied with the quality of services or the supplier no longer provides such services, or you may find a supplier with a better price offer. Switching from one platform to another may take some time. What needs to be done to make this transition as comfortable as possible?

For example, some Amazon sellers received a letter informing them of stopping Amazon VAT services tax agency. Sellers have until November 1, 2024, to find another service provider and implement the transition.

When is the best time to start a transition? 

If you have already made a decision, then it is better to start this transition as quickly as possible. Some countries such as Germany and Poland can be transferred to a new VAT service operator quite quickly – within a week. For some countries, such as Spain, a longer transition period will be required as a new power of attorney must be issued, apostilled, and translated into Spanish. And this in some cases takes up to 3 months. You can complete all the documents and hand them over to the new service contractor and indicate to him the specific reporting period from which you will come to submit reports, so you will not have to pay for both services.

What about filing an annual report if during the year I used 2 services for VAT filing?

If you switched in the middle of the year, then you must submit the annual report with the operator with whom you work on the date of filing the annual report, since your digital certificate is linked to it. If your new operator has integration with the platform on which you sell, then you can load all transactions from previous periods. Or you can save all previously filed reports and add them to the annual return manually.

What documents should I request from the previous operator?

Depending on the country of the tax number, the storage period for tax documents ranges from 5 to 10 years. This means that the company must ensure the storage of tax documents for tax audits for up to 10 years. This applies primarily to invoices; if your company does not issue invoices, these are bank statements and reports on sales of goods from marketplaces. Here we give a list of documents that you can request from the previous tax operator company:

1. Tax reports: all tax returns, sales lists, other submitted documents;
2. VAT reports/ transactions reports;
3. Invoices;
4. Letters from tax office.

Appointment of a new tax representative

For some companies from outside the European Union, obtaining a VAT number is associated with the obligation to appoint a representative. This procedure must be repeated during the transition. For some countries, such as Italy, it may be necessary to re-issue the tax number when moving from one tax representative to another. Accordingly, the information that needs to be reflected in invoices will change.

Changing the address for correspondence with the tax authority

Tax authorities of different countries send notifications, tax reconciliations, and requests for fines to the address of the tax representative. When moving to a new representative, you must also change the address to which such letters are received. This procedure is usually carried out by the new tax representative when he receives a power of attorney to file returns.