Richard Asquith is CEO of VAT Calc – VAT & technology company. He is also a winner of International Tax Review's ‘Tax Innovator of the Year’ award. In our chat we dive into literature, wine and relations; why e-invoicing is the thing; on VAT automation; on some predictions; on thought online leadership; on VAT fraud and which countries stand out as having the best VAT systems.
Richard Asquith is CEO of VAT Calc – VAT & technology company, making the global VAT compliance as easy as at all possible. He is also a winner of International Tax Review's ‘Tax Innovator of the Year’ award. Richard was also a VP of Avalara, and before that was working for Big 4s in the UK, Hungary, Russia, France and the US.
On literature, relations & wine
But we start our chat with Moscow, English and Russian romantic classic literature, Dostoyevsky and Chekhov’s The Lady with the Dog story. Love towards travelling and literature turned into love of a variety of languages, cultures and VAT systems across Europe. Richard also now is fond of US literature of 50s and 60s – many might not have heard of a brilliant Stoner by John Williams and Bullet Park by John Cheever. Besides the books, now when the kids have grown up there is more time to re-discover a nice conversation with his wife as well. Richard adds that a good French wine completes a perfect picture – a chat with the loved one along with a glass of wine, and a book.
E-invoicing is the thing
Once we start talking about VAT Richard’s eyes sparkle. Countries are queuing up following success of Italy, Spain and Hungary who introduced e-invoicing and thus reduced the VAT gap to a significant extent. Poland, France, Slovakia, Slovenia, Romania, etc are lining up next to do the same. Tax people should not start falling in love with technologies, cause tax authorities are doing the same.
On VAT automation
Automation at VAT Calc is focused on VAT compliance by applying the VAT rates correctly, especially on the live invoices, as well as filing it through a VAT return. The other problem was that VAT compliance soft was often made by IT people with vague understanding of how VAT works, especially in so many different EU Member States. VAT Calc has managed to create a unique IT platform that does both – applies correct rates on invoices and puts that on the respective country’s VAT return (in the EU and beyond). Moreover, the system also makes a reference to the respective domestic law of the country where the VAT return is to be filed. It can be used by all possible industries.
On some predictions
Richard predicts that soon the tax authorities might be able to connect the VAT liabilities with the cash flows through non-banking payment providers – they might even end up as being responsible for VAT calculations and collections, like in the split payments system. He predicts that the tax authorities will also focus more on the gig and sharing economies. He also thinks that soon the days of banking and insurance enjoying VAT exemption will be over.
On thought online leadership
Richard once learned that blogging once a day works and it really does. Lately, though, it’s getting herder to keep the unique voice & thought leadership. But tax authorities with their opinions help Richard with funny explanations to blog about.
On VAT fraud
Once we discuss a VAT risk management tool in order to minimise the risk for businesses to enter into a fraudulent transaction, Richard suggests a blockchain system as the possible future solution, but only for a narrow circle of cases – most likely it will not prevent fraud, but it makes detection afterwards easy. VAT Calc current soft allows transaction parties to compare the legal reasoning and the corresponding case law for the intended transaction – that might help as well. Richard predicts that in some 3 years’ time EU VAT system will be in a comparably good shape with tackling VAT fraud with smaller constant improvements in the system. The charging of domestic rate on cross-border transactions seems unlikely.
On the best VAT systems
Speaking of an ideal tax system Richard highlighted Australia and New Zealand for having a very small number of VAT exemptions and reduced rates, thus making the system simple. It is also a good example regarding tackling VAT on financial services, as well as because having a very low VAT gap. India has made a great progress with GST. OECD (Piet Battiau and his team) has done a massive work in harmonisation and simplification of indirect tax.