Companies warned of XML tax hazard

Electronic transaction specialist Perwill said Customs must be consulted before discarding paper-based records of invoices, credit and debit notes. Managing director Bill Pugsley said that strict rules governing VAT transactions are also applied to XML-based documents.

‘Many organisations do not realise they may be breaking the law and potentially leaving themselves open to severe financial penalties, simply by sending out XML-based invoices,’ he explained.

XML has been widely touted as a global standard for undertaking e-business transactions because data contained in such documents can be translated and understood by electronic accounting systems and is easy to display and print.

Pugsley said that Customs’ rules on existing electronic data interchange transactions apply to XML, and warned that organisations must obtain permission from Customs before switching from paper-based accounting records to XML-based ones.

He added that Customs requires a mandatory 28 days notice before it will accept XML transactions for VAT purposes.

Also published in Network News

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