Tax Stories E15 - Ronny Langer (KMLZ) on his Tier 1 VAT boutique

 

VAT & Customs boutique

Ronny was modest to relate this great achievement to a lack of competition (at least initially). He was also inspired at the beginning by the UK consultants who said that about 40% of their work is in VAT advice. 

More VAT than management 

Despite the company management duties Ronny still does client work ca 50-60% of his time. Being in a good shape technically gets the clients’ trust. For the business the international expert groups are also important, like VAT Europe network of friends and participation in the VAT expert group with the European Commission. 

Predictions

It was an interesting story how Ronny started to work with VAT – by a chance, like many things happen in our lives. His predictions are that there will be no major changes to the VAT system, also the US will not adopt VAT most likely, and that IT impact in the firm will grow until it’s about 50/50 IT and tax firm. Ronny sees some good IT development also with the tax authorities in Europe, like real time reporting, e-invoicing, but not in Germany. Because of Covid-19 Ronny is working from home already for some 15 months, and many colleagues have become more efficient, because of the time saved for daily travelling, so flexible home offices might stay. 

Let’s go criminal

In Germany it is very easy to end up with criminal proceedings regarding a tax offence. For example, if there is a VAT return amendment for above EUR 5k a special unit of criminal investigations decides if it is worth opening criminal proceedings against the management of a firm, even if they just made a mistake, not committed a fraud. For large companies it’s very easy to exceed the thresholds. For example, it took KMLZ some 4-5 years to get the criminal charges dropped where the management of a client just made a mistake. Therefore companies in Germany are paying careful attention to VAT issues. So, during the last years companies have invested heavily into the tax risk assessments and compliance procedures, that is now often digitalised. We also discussed an aftermath and bugs of the new VAT system for e-commerce effective as of 1 July 2021. But overall Ronny was sceptical about any changes to the system that could prevent the fraudsters from doing their stuff.