Inhouse tax teams facing a growing list of data sharing obligations need an easy way to explain the key steps to stakeholders (legal, product, etc) to ensure compliance with the rules.
To do this, it helps to have a mental model that describes the process and what it actually takes to “share data.”
Below, we have shared ours, which we have been repeatedly told was “very helpful”.
Using this breakdown will allow you to better understand (and explain) your obligations. It is also helpful for identifying areas for focus and attention.
Collecting the data is the next step in the process. Many platforms have updated their seller onboarding processes to account for the additional data fields (like Date of Birth for individuals in the EU). Much of this required work with product and communications (e.g. support) teams.
This cross-functional coordination was essential to:
This practically meant that teams that don’t usually work together had to sit at the same table for the first time. Tax teams had to make their case to ask for engineering resources to build the scripts necessary for generating compliant XML files.
Another common concern was related to “enforcement” - what to do if a platform seller fails (or refuses) to provide the necessary mandatory information, eg., a valid tax ID. There are several approaches on the market, but according to regulation, platforms are required to ban sellers to register and are not allowed to remit any payments.
When it comes to tax ID’s some platforms were able to use our tool, Fonoa Lookup, to find missing names, addresses business registration numbers and other information from sellers.
