CRS for invoices in EU and worldwide

[newNomad]

Hi guys
was wondering if there is something like CRS for invoices data, i.e. interchange‌ of invoicing data between EU countries or such

I explain, in some EU countries electronic‍ invoices are already mandatory so if company A invoices company B any amount the TO⁠ (tax office) would expect this amount to neccessarily show up as Revenue in company B⁤ decleration
Now what about if the companies are located in two different EU countries? Is⁣ VIES playing a role there or it's irrelevant?

What if we have a company A⁢ in an EU country invoicing a company B which is outside EU (such as Switzerland︀ for example), now the company B will put this invoice into their accounting as Expenses︁ and the question is whether this tax authority of Switzerland knows that this item is︂ linked to the VAT code FR123456789 (example of France) and if so whether this information︃ in some way can flow to French TO?

The effective cash flow in this analysis︄ is irrelevant, i.e. the transaction is maybe settled in cash, crypto or using an offshore︅ account in jurisdiction Z; what is of relevance is any other bookkeeping/accounting flow which exposes︆ the transaction even if CRS which monitors the electronic cash flows (not hard bag cash)︇ reveals nothing

 

[Martin Everson]

What you need to be aware of is that even⁢ though Switzerland is not part of EU it does follow the 6th VAT Directive of︀ the EU and has a Bilateral II Agreement with EU which has a section aimed︁ at fighting fraud including VAT Fraud etc.

VAT fraud is something taken seriously by EU.︂ Although I do not know if this is an automatic process of sharing info they︃ are working together.

 

[newNomad]

@Martin Everson Well I was not referring necessarily to VAT in particular, under some limits‌ there are many possibilities not to charge VAT (but also not claim it back), but‍ I do not know how granular are any potential checks on foreign partner invoices i.e.⁠ if the company B is getting audited can someone pickup that particular invoice, check the⁤ VAT code and the address of the company A and then proactively investigate with the⁣ country A's tax authorities whether the company A is in compliance (not just with VAT,⁢ but in general reported revenues)

What I have heared is that some companies, even medium︀ sized, have a well structured compliance department checking all the time on their suppliers (i.e.︁ if you are a supplier they demand certificates, tax residency certificates, insurance policies and such,︂ IBAN changes or even smallest mistakes on the invoices are taken seriously and you are︃ called back to explain the 'discrepancy' or reason for change)
I was wondering why would︄ a company spend resources on checking compliance of their suppliers all the time - must︅ be there is something which 'pushes' them to work only with 100% compliant suppliers? Why︆ obsess on checking on your supplier all the time and not just dump the invoices︇ in the accounting, anyway if something's off it's the supplier's problem, no?

 

[Sols]

Probably because they︂ are or expect to be audited. This can be a for a range of different︃ reasons. For you, what it means you need to have your paperwork in order if︄ you want to work with these large clients.

Changes in IBANs are also a risk︅ of fraud. Impersonating a vendor/supplier and providing real-looking invoices with the scammer's is a very︆ common fraud used against businesses