Fiscalization Implementation of Electronic Fiscalization for Revenue Assurance (Public Sector Tax Authority)

Transcription

1 Fiscalization Implementation of Electronic Fiscalization for Revenue Assurance (Public Sector Tax Authority)

2 Who we are? Data Tech International Ltd. ( is solution development and consultancy company based in Serbia. We assist and advise governments combating tax frauds with independent, real-time, tax compliance data solution that offers revenue authorities, device developers, sales tax payers and customers comprehensive benefits in electronic fiscal revenue reporting. Goran Todorov Managing Director, co-owner, Innovation and use of emerging technologies for tax, Certification of invoicing systems, Consulting Revenue Authorities on fiscal compliance. 15 years in development and implementation of anti sales suppression technologies Ivan Pavlović Product Manager, co-owner, Software development, building enterprise software, testing and roll out to production. 20 years of international software development

3 Agenda Fiscalization VAT fraud and suppression of sales Governing principles road to success TaxCore solution System components Online and offline operations 4 audit methods Fraud detection by the public eye

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5 VAT Fraud and Sales Suppression

6 Under Reporting Falsifying books or deleting sales records

7 Zappers and Phantom-Ware On or off premise modification of sales records to manipulate ledger using software HONEST MERCHANT Aby Rd. Anycity, Anystate, PURCHASE No Item Qty P Total Hamburger Beer Salad Total Tax Total HONEST MERCHANT Aby Rd. Anycity, Anystate, PURCHASE No Item Qty P Total Beer Total Tax 5.00 Total

8 Wrong Tax Rates Intentionally or unintentionally applying the wrong rates to sales of goods and services Normal rated VAT items Zero rated VAT items If Milk is Zero rated, is Chocolate-Milk Zero rated too? If Bread is Zero rated, is Toasted Bread also Zero rated?

9 False Expense/Credit/Refund Creating false records to justify lower income taxes

10 Governing principles

11 Governing principles The scope of implementation must include ALL taxpayers Phase implementation per group of taxpayers (personal invitation)

12 Security of the system is based on the Public Key Infrastructure (PKI) and must be under full control of Tax Authority Governing principles System must enable both on-line and offline issuing of fiscal receipts All issued fiscal receipts must be verifiable instantly in a manner which is simple for tax inspectors or any member of the public

13 Governing principles Generate demand for fiscal receipts (get receipt/scan QR/win the prize instantly) Most of existing invoicing systems in the market should adopt to the new system

14 Governing principles Components of the system on taxpayer s side are: POS, cash register or software used for fiscal receipt issuing Software, hardware or web service which controls the fiscal receipt, applies digital signature and sends receipt data to the server of Tax Authority (Sales Data Controller) Digital certificate for signing receipt

15 Market is open to all device and software vendors Governing principles Increase competition among vendors and encourage developers to meet certain needs for special kind of businesses

16 Free of charge or very affordable fiscalization for taxpayers who opt to use only online system Governing principles Free web, mobile and PC applications for fiscalization Availability to fiscalize receipts using any Internet connectivity (not only GPRS)

17 TaxCore is a scalable software solution that enables tax compliance through usage of commercially available techonlogies and public APIs to issue fiscal receipts in online/offline environment and collect audit data

18 Turnkey or Module-Based Deliverables External Data Consumers Accreditation Analyitics Core Systems External Data Providers Taxpayer Database LDAP Semi-connected or offline Invoicing Systems and E-SDCs Online Certified Invoicing Systems connected to V-SDCs https Failover / Load Balancer ISP A V-SDC01 ISP B V-SDC02 ISP n V-SDC0n Failover / Load Balancer Draft Law 3rd Party Vendor Accreditation Taxpayers Backend Data Center TaxCore Backend API App TaxCore Backoffice TaxCore Reporting Transactional Database Data Warehouse Network Storage Backup Storage Feasibility Studies Taxpayers Customers POS/SDC Vendors Inspectors Auditors QR Code Verification On Site Smart Card Audits ISP Invoice Verification Service Taxpayer Portal (Frontend UI) Consumer Compliance Award POS/SDC Developer Portal Secure Element Programming Stations DTI Revocation List Distributor Certificate Authority Support Maintenance Training Capacity Building Knowledge Transfer Technical Assistance

19 Components of Electronic Fiscal Device From Customer to Tax Authority Data Center

20 Certified Invoicing System CIS Certified Invoicing System (CIS) means a point of sale invoicing device or software which is an electronic device or software application that is used by a business for management control in the areas of sales analysis and stock control; and a component of the business s EFD into which a cashier enters the transaction data for each transaction made by the business; and from which a fiscal invoice for the transaction is issued Cashier SDC Secure Element POS

21 Sales Data Controller SDC Sales Data Controller (SDC) is the hardware or software component of an EFD that receives transaction data from a POS component of the EFD; analyses the transaction data into fiscal data; formats the fiscal data as a fiscal invoice, creates the digital signature for the EFD and records the digital signature on the fiscal invoice; transmits the fiscal invoice to the POS; preserves the transaction data and fiscal data in an irrevocable and secure manner; and transmits the fiscal data to the Authority s system; Cashier SDC Secure Element POS

22 Secure Element SE Secure Element (SE) means the software and hardware used by an EFD and the Authority to prevent tampering and unauthorized use of fiscal data transmitted to the Authority s system and to maintain the integrity of the fiscal data Cashier SDC Secure Element POS

23 Off-Line or Semi-Connected System Electronic Fiscal Device consists of two components: Accredited POS and E-SDC. Components are packed in single case or delivered as two separate devices connected to work according to Public technical specification and produce fiscal receipts Permanent internet connection preferrable but not required Electronic Fiscal Device Remote Audit Internet HTTPS Local Audit Upload Data Cashier CIS E-SDC Fiscalization Server External SDC fiscalizes invoices and makes sure audit data reaches Fiscalization System using remote or local audit Certified Invoicing System (CIS) is any Point of Sale (POS) system, cash register, application or invoicing system accredited to work with Fiscalization System to issue fiscal invoices

24 On-Line System Cashier Mobile POS App Each combination of CIS and V-SDC is equivalent of Electronic Fiscal Device Cashier Desktop POS App Internet HTTPS HTTPS Cashier POS System Virtual Sales Data Controller Fiscalization Server Certified Invoicing System (CIS) is any Point of Sale (POS) system, cash register, application or invoicing system accredited to work with Fiscalization System to issue fiscal invoices Online Shopper Web Shop

25 Proof of Audit Each Secure Element has Transaction Limit If Transaction Limit is reached SE is locked If all invoices are audited TaxCore issues Proof Of Audit to SE Proof of Audit resets Transaction Limit Seamless, automatic process, invisible to taxpayer unless audits are not performed

26 Audit Methods REMOTE LOCAL QR SCAN SE AUDIT LATENCY Instant On Demand Instant On Demand DATA SET Full Full Subset Internal data only JOURNAL AND ITEMS Full Full No No SECURITY Full Full Full Full Internal data contains fiscal data in encrypted form. Content of internal data is readable by the Tax Administration only. Internal data receipt counters and totals (very simplified representation): #1 =110$ #2 =60$ #3 =35$ #15 =80$ #16 =10$ Internal data Result: SE signed 1090$ in total 875$ worth missing 11 receipts

27 Fraud detection by the each and every customer

28 Fraud detection by the each and every customer

29 Fraud detection by the each and every customer

30 Invoice Verification Save Receipt Send to Send to SMS Play Lottery Donate Loyality

31 Each invoice or receipt is securely stored and available to authorized persons only.

32 TaxCore / VMS Demos, Q&A, Deep Dive Session Westin Hotel Tomorrow, Wednesday, 18:30

33 Resources Manifesto (En, Fr, Es, De, Pt, Sr) Sales Data Controller Fiji Revenue And Customs Services VMS

34 Thank you! Request a copy of white paper: Fiji Mandatory Digital Invoices