Anton Tsonev the Global Head of Tax with SumUp
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What is the main topic discussed in this episode?
Breakfast Business with Enterprise Ireland on Newstalk.
What is the history and significance of VAT in Europe?
VAT was introduced first in the 70s as a temporary tax. 50 years later, it raises over €1 trillion for European exchequers and is going nowhere. Now the EU is looking at creating a simplified Europe-wide way for companies selling across borders digitally. The Commission has included the payment service providers SumUp to its expert group and Anton Svanev is the global head of tax with SumUp and is on the line from Bulgaria. Good morning, Anton. Good morning to you and to your audience, Joe.
Thanks for having me here. Tell us a little bit more about what SumUp does. SumUp is a global fintech famous for our sleek white card readers. Actually, if you tapped your card for a coffee this morning before starting the show... We have a coffee machine here in Newstalk Towers.
I'm sorry about that.
Well, probably your nearby coffee shop is a great chance. It had a sum-up card reader. But beyond the card readers, we give the merchants a simple toolkit for payments, point of sale, so they can manage their front side of the business and the back side of it. Invoicing. business accounts and of course cards so they can spend less time on administration. And we're a financial ally of over 4 million merchants across four continents offering an ecosystem, if you want to call it, for small merchants so they can run their business. The aim is super plain, remove unnecessary complexity to the merchants so they can focus on what really matters, serving their clients.
Okay. And so I suppose you'd be a rival to the likes of Square or even our own Stripe. Would that be fair?
Well, our paths are different, but we're in the same industry, I would say. Okay. And you make money by charging a transaction fee for every little tap.
What role does SumUp play in the VAT expert group?
That's our payment system, yes, but we're much more than that. We do software service, as mentioned, the point of sale, business accounts, and physical cards as well.
Now, you have been asked to join the expert group for the European Union, and that is looking at VAT and cross-border payments. What does the EU want to change when it comes to VAT?
Well, it's actually a pivotal moment today and the upcoming three years of the mandate of the VAT expert group. Because this is the time where the European Union is actually going to implement the so-called VIDA, VAT in digital age. It's a huge package of reforms aimed at simplification and digitalization of VAT. With that being said, there are a bunch of initiatives like the single VAT registration, the... Electronic invoicing, which is going to be huge, and it's included in the budget of Ireland.
Yes, this week, in fact, it was in the budget this week. So let's focus on the single registration because that's important. At the moment, if you're an Irish company and you sell in Bulgaria and Estonia, you have to register with the tax authorities in Estonia and Bulgaria, which can be annoying, especially if you're selling in 20 or 30 countries separately. In future, will you just have to register once in your home tax authority and that will do you all over European Union?
Yes, absolutely. This is the main aim of the commission to introduce the single VAT registration. So you just comply in one country and pay the VAT that is due in all the markets that you have. Say you're Irish country. and you sell cross-border across all the European countries, you no longer need to have any registration outside of Ireland and you don't pay anything outside of Ireland. Basically, the Irish Revenue Agency is going to be responsible to move the cash around.
Which should remove a lot of red tape for companies. You also mentioned e-invoicing. What is e-invoicing?
Well, mandatory invoicing has to be in place by July 2030. So Ireland is actually going to implement it earlier than the final deadline. It's a standardized system whereby companies, B2B first, will exchange the information of the invoice. So no longer PDFs or paper invoice are going to be acceptable. But everything is going to be through electronic form.
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