In 2018 executives from private companies working with digital documents and members of tax administrations started a dialogue about continuous transaction controls – CTC. The group operated under the umbrella of the International Chamber of Commerce – ICC, as we had previously talked about in this older blog post.

Besides having enriched the mutual understanding on key digitization topics among its members for years through informal exchange of knowledge and ideas, the group in 2020 issued a key asset that has since become a digitization beacon, referred to in numerous countries’ CTC rollouts:  a set of principles and practices aimed at allowing tax administrations to do a better job while at the same time reducing complexity and costs for taxpayers thanks to the ability to make reporting of tax related data, at least in relation with commercial transactions, part of a business process and not a tax-specific ‘bolt-on’ to periodically report to the tax authority.

The publication “Practice Principles for Implementation of Continuous Transaction Controls”[1] was the first outcome of this unique group of tax administration and business practitioners whose primary goal in coming together was to have a neutral space for digitization stakeholders to pursue an ongoing dialogue. ICC as a unique global business organization was critical to the incubation of this dialogue, however as the work continued it has gradually become apparent that supporting a practice-oriented public/private sector dialogue is not part of ICC’s key policy missions.  ICC and the group’s members have therefore successfully collaborated to find a more appropriate long-term home for this group, which has been found in CIAT.  We sincerely thank the ICC for the support given for over five years to that group.

CIAT has been working on CTC related matters for some time now, particularly with the implementation of national electronic invoicing systems in Latin America. Certainly, time has shown that the introduction of CTCs not only had helped enterprises’ tax compliance but had also granted taxpayers the reduction of operational costs in tax reporting matters and through the potential expansion of interoperability among participants in supply chains.

Additionally, we have also seen the development or improvement of services in the tax administration including the availability for small taxpayers of solutions to issue invoices, the hosting of input – output books and other bookkeeping tasks within the tax administration systems, the offering of pre-filled tax returns for many taxpayers or the support for expedite VAT refund processes.

The dinner would not be completed without mentioning the improvements that other areas of government have achieved in different places, from integration of electronic invoices with the provision of health services, to improvements in public sector purchases, to targeting economic aid during the restrictions imposed during the pandemic.

At the same time, we know that different taxpayers have different consequences when dealing with CTC, both in terms of complexity and opportunity. A small brick and mortar convenience store that deals mainly with truck drivers near an international border does not have the same challenges or issues as the companies that own the trucks, nor the ones that face the companies that produced, sell, export, import, and distribute those goods in the two jurisdictions. Multinational companies will have different issues than those that work in a single jurisdiction, financial institutions will see things through a different lens than a factory, and those operating in a digital market are faced with yet a different set of highly specific considerations.

We know we still have work to do together, sharing and exchanging ideas, challenging our own positions to keep improving CTCs, and the digitalization of the surrounding ecosystem: that’s the purpose of the new CIAT Digitalization Dialogue group, a worthy successor to an initiative that will continue to ensure a close liaison with ICC as the World Business Organization.

This dialogue of course welcomes practitioners from the original group, and it’s our hope that it will attract not only other actors from the private sector, including naturally companies that work in tax compliance, but also tax advisors and consultants, as well as ITC oriented companies, people from the academia and representatives from the tax administrations and other regional tax organizations. Importantly, the CIAT Digitalization Dialogue demands just one key thing from its members and that is to actively participate with an open mindset to continuously optimize the relationships among stakeholders.

This is the news we at CIAT are keen to share with you, but it is also an invitation to those that want to contribute to the ideal of a global economy where businesses and governments exchange data productively, and with appropriate safeguards, in frictionless digital networks. We welcome you to join the mailing list that will be available on September 7.

Welcome to the Digitalization Dialogue.

[1] Download the document for free from the ICC site here

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