Our first article in our TaxPay series, explaining some of the challenges in making international tax payments and solutions to those challenges.
Payment Methods for Settling Taxes in EU Countries: France, Italy, Spain, and Romania
Paying taxes in different EU countries requires businesses to navigate various national procedures, systems, and payment methods. Each country has its own specific guidelines for how taxes, including VAT (Value Added Tax), corporate income tax, and other levies, must be settled. Below is a look at the different payment methods for settling taxes in France, Italy, Spain, and Romania. These are just some of the countries our clients have had recent trouble settling their Tax Liabilities.
Desucla TaxPay enables businesses to settle all tax liabilities across the globe without the need for local bank accounts, knowledge of specific payment processing or dealing with their banks FX rates. Choose to settle in a single currency (for example settling in USD to a US based account) for onward payment in local currency via the correct method as required for that tax type and country.
France
– Bank Transfer (Virement Bancaire): The most common method for tax payment in France is via bank transfer. French businesses can make tax payments directly from their bank account to the French Treasury using a unique tax reference number. Cross-border businesses must use a French bank account to ensure smooth processing.
– Direct Debit (Prélèvement Automatique): For regular taxes like VAT or corporate tax, businesses can set up a direct debit authorization with the tax authorities. This ensures that tax payments are automatically deducted from the business’s bank account when due.
– Online Payment Portal (Télépaiement): France offers an online portal where businesses can make tax payments. The portal, part of the “Impots.gouv” platform, allows businesses to submit payments electronically.
– Payment by Card: French authorities also allow tax payments via credit or debit card, primarily for smaller amounts or individuals, but businesses can use this method for certain types of taxes.
– Desucla TaxPay: A single solution for Treasury and Tax professionals to manage tax payments. Settle in your local currency, lock in a single beneficiary and utilise our dedicated Tax Payments routes for each tax type & country.
Italy
– F24 Payment Form: In Italy, most taxes, including VAT and corporate income tax, are paid using the F24 form. Businesses fill out the form, specifying the amount and type of tax to be paid. Payments can be made through online banking, the post office, or directly at a bank.
– Online Banking (Home Banking): Italian businesses frequently use home banking platforms to process tax payments. Once the F24 form is completed, payment can be settled via the company’s online bank account.
– Electronic Payment Through Revenue Agency Portal: The Italian Revenue Agency offers an electronic system where local businesses can file and pay taxes online. This portal is integrated with Italy’s Sistema di Interscambio (SdI) for e-invoicing, making it convenient for companies to manage their tax obligations digitally.
– Direct Debit: Large companies often set up direct debit arrangements with their banks and the Italian tax authorities to streamline the process for recurring payments, such as VAT. A local bank account is required.
– Desucla TaxPay: A single solution for Treasury and Tax professionals to manage tax payments. Near instant onward payment available for example funds received in your TaxPay USD account release FX trades and onward payments to Tax Authorities – reducing the time for funds to be received by the Tax Authority (and reducing any risk of penalties and fines).
Spain
– Bank Transfer (Transferencia Bancaria): Tax payments in Spain are commonly made through bank transfers. Businesses are required to use an authorized Spanish bank account to transfer the payment to the tax authorities, ensuring that the tax reference number is included in the payment.
– Direct Debit (Domiciliación Bancaria): Businesses can authorize Spanish tax authorities to withdraw taxes directly from their bank accounts. This is often used for regular VAT filings or corporate tax payments, ensuring timely payment and avoiding penalties for late filing. A local bank account is required.
– Online Payment (Pago Telemático): The Spanish Tax Agency (Agencia Tributaria) provides an online payment system where businesses can file returns and settle taxes. The portal accepts payments via electronic banking or cards linked to a Spanish bank.
– Payment Through Banks: For smaller businesses, payments can be made in person at a Spanish bank branch. Banks process these payments on behalf of the tax authorities, but this method is becoming less common due to digitalization efforts.
– Desucla TaxPay: A single solution for Treasury and Tax professionals to manage tax payments. Configurable workflow for approval between Tax and Treasury teams, locked beneficiaries to approved Tax Authorities (or tax agents) removing fraud risks and complete payment oversight.
Romania
– Bank Transfer: Bank transfer is the primary method for paying taxes in Romania. Businesses are required to transfer tax payments to specific accounts designated by the Romanian tax authorities, depending on the type of tax being settled. For correct allocation to your account a local bank account is required to be used.
– Online Payment Portal (Ghiseul.ro): Romania has made significant strides in offering an online portal for tax payments. Through Ghiseul.ro, businesses and individuals can settle their tax liabilities using bank cards. This portal is part of Romania’s broader e-governance initiative to simplify administrative processes.
– Post Office or Treasury Office Payments: Romanian businesses can also settle taxes in person at the post office or through designated treasury offices, although this method is used less frequently due to the convenience of online systems.
– Payment through Treasury’s POS Terminals: At local treasury offices, businesses and individuals can use POS terminals to make payments using debit or credit cards, offering a flexible option for immediate settlement.
– Desucla TaxPay: A single solution for Treasury and Tax professionals to manage tax payments. A cross entity, cross tax type and cross-country platform to provide visibility of future, current and completed payments. Documentation stored for each stage including payment demand, payment requests (for Treasury teams), payment proof and tax authority confirmation of receipt & allocation.
Common Trends and Challenges
– Preference for Digital Payments: Across the EU, including in France, Italy, Spain, and Romania, there is a clear trend toward digitalization of tax payments. Online portals and bank transfers are the primary methods, driven by efficiency and the desire to reduce administrative errors. Often these require specific sequencing in relation to the return (before/after the submission) to avoid penalties and return of funds (often months later).
– Country-Specific Bank Accounts: In most countries, foreign businesses must maintain local bank accounts to settle taxes. This can complicate cross-border operations, as businesses need to navigate different banking regulations and requirements. Often referencing for correct allocation of funds is required and cannot be supported by cross border international payments (i.e. a payment from your local bank).
– Administrative Costs and Language Barriers: In some countries, including Spain and Romania, tax payment procedures can be cumbersome for foreign companies. Navigating online systems in the local language, alongside complex payment processes, often requires assistance from local tax professionals.
Tax and Treasury teams have sufficient challenges just keeping upto date with changes to each countries tax demands especially given the pace of new taxes, changes to existing and new schemes being rolled out. Desucla TaxPay removes the payment burden from Treasury and Tax teams, facilitating payments inline with company payment runs, reduces risk of errors and offers dedicated tax payment methods across the globe.
Desucla TaxPay
Contact us today for more information about how Desucla TaxPay can help your organisation:
– easily grow into new markets,
– reduce the risk of tax payment fines,
– reduce your operational costs and
– complement your existing Treasury & Tax software (simple on-boarding & adoption)