Xentral & The Taxdoo API: Making Tax Compliance Accessible
As an API-first company, our goal is to make automated VAT compliance accessible to all of our clients through our open API. This flexibility allows us to integrate with any solution, regardless of the system. A great example of how this flexibility has benefitted users at scale is one of our partners, xentral.
Firstly, let us introduce you to xentral; as a cloud-based open source ERP software, xentral bundles business processes with over 1000 functions and interfaces, enabling companies to automate administrative tasks and grow their business in a sustainable way.
Intrigued to find out more about xentral? Book a free demo here.
What does the Taxdoo API do?
You can use the Taxdoo API to send new order data, upload purchase prices and monitor your VAT liabilities abroad. Based on this data, Taxdoo monitors whether the €10,000 selling threshold has been exceeded (for more information on the recent OSS tax reform, check out this article here). This evaluation happens on a daily basis, and updated exchange rates in the respective country are automatically taken into account when xentral users send us their transaction data.
How does xentral use the Taxdoo API?
The core business value for xentral lies in ensuring that customers can work internationally and make use of the full potential of the EU common market. Put simply, if the customer’s business sells to more than one country, Taxdoo makes their lives much easier by synchronising automated tax compliance to their business process.
Integrating Taxdoo services for xentral was a no-brainer; with the Taxdoo interface, orders can be transmitted from xentral to Taxdoo in an automated fashion.
A normal scenario is that the relevant order data is sent from xentral to Taxdoo. On Taxdoo’s side, the corresponding accounting preparation is carried out (account assignment, adjustment of tax rates, support for the respective advance VAT return).
A key advantage for xentral is the daily data transfer feature, ensuring that results are accurate and updated in real time. These daily data transfers enable taxes to be paid abroad or define whether a merchant has reached the distance selling threshold. Therefore, merchants are able to synchronise VAT compliance with their ongoing business processes, rather than as a one-off or annual consideration.
Furthermore, invoices, orders and credit notes are included in this data transfer, with the ability to adjust the start date, which accommodates the fast paced nature of e-commerce.
Let’s walk through a few use cases in more detail.
Scenario 1: Invoicing in xentral
We assume that invoicing has taken place in xentral, without any errors. Typically, customers in this scenario do not use Amazon’s Pan EU or Central Europe program.
The business service provider then outlines an order containing one type of item, the quantity of which is two.
Item 1 is stored in a warehouse in Italy. Item 2 is stored in a warehouse in France.
The key advantage here is that sales from other channels are routed to Taxdoo and taken into account. Storage location data is critical for creating an accurate tax evaluation.
In terms of the data export, this takes place from xentral to Taxdoo and can later be passed into the accounting system of the merchant, like DATEV. The prerequisite for this is the completeness of all invoices from all channels in xentral.
Scenario 2: Use of Amazon VAT Service
We assume that the client is using Amazon’s Pan EU or Central Eastern Europe program. The main requirement for this use case is the use of Amazon VAT Calculation Service (VCS) for invoicing of all Amazon transactions.
The data export takes place from Amazon VCS and, via xentral, reaches Taxdoo and can later be transferred to the merchant’s accounting system, for example, DATEV. In order to provide a uniform process chain, all invoices must be available in xentral. The order data from these invoices is transmitted to Taxdoo; a single data export from Taxdoo to DATEV is possible, further streamlining this process.
In this case, the invoice is created according to Amazon guidelines and thus transmitted to Taxdoo, where the accounting preparation takes place followed by transmission to DATEV.
Overall, this integration enables xentral users to drive business efficiency and as a bespoke API integration, has aligned with the xentral product to enrich the service offering to make tax compliance accessible to xentral merchants.
Interested in finding out more about what Taxdoo can do? Check out our API Documentation here or drop us a question on our Developer Support Community.
