Electronic Tax Filing At The European Union

June 26, 2009  |  Adoption, Publications

Traditionally, tax returns were filed using paper forms. With the increasing number of taxpayers and complexities arising in taxation, it has become impossible to maintain records on paper. The current preference is for electronic means of record keeping and tax filing. In this day of Internet and E-commerce, every state stresses E-filing of tax. An E-filing system permits the filing of almost all taxes through a web portal.
Through an electronic, tax-filing system, every individual and company can file their tax returns through the Internet. An E-filing system permits the filing of all taxes through a web portal using a digital certificate issued by any registered certification authority. Taxes are filed online with the help of a soft, electronic ID PIN and password provided by the tax authorities of the respective state. Tax payers may easily confirm filing and payment status by means of the Tax Board’s telephone service or by the use of SMS.

The Inland Revenue in the United Kingdom is responsible for providing an effective and fair tax service to UK citizens and businesses. One of the objectives of the Inland Revenue is to provide online services to citizens. It also plays an important role in providing a nationwide, electronic, tax-filing system for individual tax payers that employ a self-assessment system to calculate their tax liability.

Meanwhile, by law, businesses in France with an annual turnover of 15 million Euros must file and pay their corporate taxes electronically. The Irish Revenue Department believes electronic tax filing reduces errors due to manual processing of tax claims. The Revenue Online Service facilitates the filing and payment of taxes online. It also allows taxpayers to carry out inquiries on their existing tax status and review their earlier tax transactions. Customers who use the E-filing system are given digital certificates that allow them to digitally sign legally enforceable tax returns.
What Are The Benefits Of The E-Filing System?
E-filing uses an automated system to speed up the processing. It also cuts down on the use of paper. A considerable amount of records can be saved and kept in a system or disc. It is, however, very difficult to keep the same amount of records in paper because of the volume of papers required. It is easy to retrieve data from electronically saved records. E-filing considerably reduces errors. A large amount of work can be achieved in a shorter period of time. In fact, E-filing increases employee productivity. It also improves communication with the tax payers and saves taxpayers’ time. In effect, the E-filing system stimulates the economy of the state.
How Is E-Filing Connected To Electronic Invoicing?
For E-filing, E-invoicing is very necessary. For the electronic filing of taxes, electronically recorded documents are required. Paper documents cannot be accepted for E-filing. To calculate taxes on sales, invoices are a must. Sales and purchases made online generate E-invoices. E-invoices are the required documents for E-filing. EU Directives emphasize the importance of electronic invoicing for E-filing. EU member states are required to include EU E-invoicing and VAT standards in their national laws.

Source: IBLS

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