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Vertex O Series for Communications

Automate complex telecom and communication services tax to reduce risk and improve audit performance.

Vertex Tax Solutions for communications

A powerful solution for communication services tax

Communications tax complexity exploded with the introduction of non-traditional communication services like streaming, IoT, satellite technology. Phone service providers are no longer the only companies with comm tax obligations. A typical phone or internet bill may have several taxes and fees applied, and the telco may be processing anywhere from tens of thousands to millions of invoices on a given day. With federal jurisdictions, emerging technologies, and large numbers (transaction volumes, returns forms, individual fees and taxes, etc.), the tax, finance, and IT teams have a lot to gain from tax automation, location precision, and exemption management.

Vertex offers robust, proven tax determination solutions to integrate with your communication billing system for reduced risk. Let us help you grow with confidence and improve compliance processes.

Vertex Indirect Tax for Communications supports 100+ different communication services for tax calculation

Explore the Features, Benefits & Highlights

Automate complex calculations for complex services.

Continually updated tax content supports tax determination and the calculation of taxes, surcharges, and fees for U.S. and Canada traditional telecom service providers, as well as non-telecom companies who now provide communication services.

North American content includes:

  • Cable, internet, & satellite
  • Ancillary, interstate, & intrastate services telephony
  • Data Transmission
  • Voice over Internet Protocol (VoIP)
  • Wireless Network
  • Wireline
  • Audio & video streaming, mobile gaming, online dating
  • Prepaid

Enhance accuracy with pinpoint jurisdiction precision.

Vertex leverages the latest geospatial technology to pinpoint tax jurisdiction assignment for improved tax accuracy. Even locations with no traditional street address, like cell towers, can be supported using longitude and latitude coordinates.

Flexible configuration allows the tax engine to support your specific business needs.

Set up custom taxability rates and rules, franchise fees, delivery and recycling fees, and bundled services to meet your specific business needs. Easily update configurations as your business grows.

Streamline taxability decisions for complex communications services.

A key datapoint in determining tax is where the product is used or consumed, or where the service is performed. Vertex O Series considers multiple locations (originating, determining, bill to, ship to, service, where the switches are located, etc.) when determining tax on communication services like: 

  • Digital codes, prepaid cards, vouchers, all of which may be redeemed from a location different from where it was purchased or where the purchaser lives or works.
  • Nomadic VoIP, mobile data hotspots, etc., which, by design, are used in multiple locations.
  • Video conferencing which involves multiple parties in a variety of locations.
  • Mobile phone group plans where users live in different states.

Manage complex taxability for bundled services.

Vertex O Series enables complex rules to apply taxes and fees to bundled services or “packages” that may include home Internet, premium television, landline phones, and more. These rules consider not only the types of services included, but where and how each of those services will be used.

Manage VAT calc determination for communication service providers.

In VAT regimes, telecommunications services generally fall under standard VAT rates, they face unique challenges with place of supply rules, reverse charge mechanisms for B2B transactions, and evolving real-time reporting requirements. Take advantage of our real-time cross-border and domestic tax determination logic automating location and liability determination in countries across the globe.  Examples of our unique categories in the telecom space include:

  • Cable
  • Telephony
  • Wireless Network
  • Streaming

Integrated, automated real-time and periodic reporting.

Vertex VAT Compliance integrates with the Vertex O Series calculation engine, and generates periodic VAT returns to help ensure full compliance with VAT regulations while reducing the administrative burden of managing complex telecommunications VAT requirements. 

The solution supports Europe, APAC, LATAM, and the Middle East, and includes support for:

  • Reverse charge mechanisms as per Article 199a of the EU VAT Directive
  • B2C supplies in accordance with Article 58
  • Member State-specific reporting requirements
  • Automated separation of supplies where jurisdictionally required

Vertex e-Invoicing delivers end-to-end automation to meet local e-invoicing mandates.

Leverage edge deployment to maximize performance, especially for high transaction volumes, localized failover, data residency requirements, and more.

With O Series Edge, you can deploy any number of tax calculation clusters wherever you need without having to sacrifice real-time calculation and accumulation or central management of tax policy configuration, with advanced options that can support ultra-fast response times.

PRODUCT SHEET

Discover more about Vertex O Series for Communications

  • Data Sheet

    Product Details: Vertex O Series for Communications

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Microsoft Enables a Flexible Tax Solution for the Launch of Skype for Business

  • Connected all billing systems to a highly functioning, in-house solution for telecommunications tax
  • Improved tax reporting thanks to sales and use tax, GST, VAT, telecom, and other taxes and fees in one system
  • Positioned themselves for growth by delivering reliable, North American telecom content from Vertex

FAQs

The telecommunications industry in the U.S. faces some unique challenges related to indirect tax compliance, such as:

  • One of the most heavily taxed services in the U.S.
  • Regulated and taxed differently from other industries, including at the federal level
  • Rapidly changing technologies (with lagging regulations and guidance)
  • Potential for over 55,000 returns to be filed annually nationwide (New York State Department of Taxation and Finance, 2001)
  • Incredibly high transaction volumes, often batch or periodic processing, and subscription billing
  • Large number of impositions (taxes and fees) applicable to invoices
  • Franchise Fees, delivery fees and limited application of fees particular to specific locations
  • Complex exemption rules that may apply only to certain taxes or individual parts of a transaction
  • Complex and diverse supply chains with high allocated use scenarios
     

Additionally, there are considerable challenges for those operating outside of the U.S., including:

  • Complex place of supply rules1 for B2B and B2C telecommunications services, with specific requirements for determining customer location and status
  • Mandatory real-time reporting and e-invoicing requirements being implemented across Europe for telecommunications providers
  • Special VAT registration obligations through the One-Stop Shop (OSS) system2 for cross-border B2C services
  • Specific rules for bundled services and the treatment of digital content delivery
  • Requirements to validate and maintain evidence of customer location and status for VAT compliance
  • Complex reverse charge3 mechanisms for B2B telecommunications services where the customer is established in another EU country, requiring suppliers to identify when to apply zero-rating and customers to self-account for VAT.
1  Place of supply determines where telecommunications services are taxed for VAT purposes. For B2C, it's where the customer is located; for B2B, it's where the business customer is established. This is essential for determining which country's VAT rules apply.
2 One-Stop Shop is a digital portal that allows telecommunications providers (and other businesses) to register for VAT, file returns, and pay VAT in a single EU member state for all their B2C telecommunications services provided to customers in other EU countries. Instead of registering for VAT in each EU country where they have customers, businesses can declare and pay VAT for all their cross-border sales to EU consumers through a single electronic interface in their member state of identification
3 Reverse Charge is a VAT accounting mechanism where the responsibility for reporting a VAT transaction shifts from the supplier to the customer. In telecommunications, when a B2B service is provided cross-border within the EU, the supplier issues an invoice without VAT, and the business customer must self-account for the VAT in their country through their VAT return. This helps prevent the need for suppliers to register for VAT in multiple EU countries.

We're Here to Help You Simplify Tax Complexity

Interested in learning more about Vertex O Series for Communications? Let's connect to help you find the best tax solution for your business.