LATONA TAX SOLUTION

LATONA TAX Solution is a modular system, where each of the modules may work independently, but also with some of the others. In spite of its modular structure, LATONA TAX Solution possesses inner unity, which allows the separate sub-systems to exchange and use information from one common database, interpreting it according to the own business logic. The split of the system in separate modules is virtual, in view to comfort the process of incorporation and operation. At the same time, the system is thoroughly integrated and single in an informational aspect, as well as logically. While introducing information, in force is the principle that each economic event is registered once.

The development of LATONA TAX Solution has been based on 20-years improvement, elaboration and piling up experience in the area of information technologies. The new version of the system is based on the team experience by developing the Information System for the National Revenue Agency in Bulgaria and the requirements of the local governments for the collection of taxes and fees within their territory. The philosophy of the system is apart from improving the processes within the Tax authorities, to contribute for better services to the Taxpayers through the increase of the access possibility and information sources available to them. The system aims to improve the transparency of the Tax Administration activities and to support the Taxpayers relationship with The Government.

The software consists of a core system, including the Revenue Accounting, Taxpayer Accounting, Electronic Services, Payment Processing, Tax Assessment and Registration, and a cycle of modules to manage the Audits (including Risk engine), Objections and appeals, Penalties, Enforcements, Delinquencies, File and Document control, Correspondence, etc. It is naturally integrated with other LATONA modules and systems – LATONA HR, LATONA Assets Management, etc. (part of LATONA ERP).

The LATONA registration module aims to register all liable persons (taxpayers, insurers, and self-insurers) within a Tax register. This register is used for identification of liable persons and their activities which are subject to control.

The objective of the Registration Module is to maintain the demographic and account information of all taxpayers and to enable effective and efficient tax administration. The module provides functionality to assist with the registration and maintenance of taxpayer details and to provide information to the government, tax authorities, and public.

The Registration Module facilitates the online capturing and maintenance of taxpayer/tax account registration information. Registration data is automatically validated, and Taxpayer Identification Numbers (TIN) and Tax Account Numbers (TAN) are automatically generated, eliminating the risk of duplicates. The online capturing and validation of registration information increases data integrity. Time is saved, as this process is an online process, making the information immediately available to all sections. This institutes enforcement where no payments are forthcoming, as all sections/divisions will have been notified of the new taxpayer’s existence.

Annual counting is completely automated, resulting in a reduction in time and labor due to the current manual counting process.  The automation of the annual counting process combined with the online updating of registration statistics ensures timely and accurate management reports, as well as accurate workload analysis.

The Payment Processing Module automates the process of receiving electronic information from the commercial banks and distributes this information to the revenue and taxpayer accounts. The system supports the functions of a payments office to print and record payment order information for all cash payments received. Payments can be made directly at the respective payment offices, through manual receipt-books outside the payment offices, or received electronically from the Commercial Bank. Detailed information for payments through bank transfers is also received electronically from the commercial banks. Bar-coded paper information is received by the Post office and is electronically accepted by the system.

The Payment Processing module objective is to collect and record payments, as well as to print and record banking information for all money collected

The specifics of different tax types require different treatment. For that reason, we established variable assessment modules – VAT, income tax, corporate tax, health insurance tax, pension, vehicles, property, etc. Each type follows specific rules and validations and is subject to specific legal regulations and procedures. In general, all the returns are initially entered in summary form since there may be insufficient time to complete lengthy data entry between receipt up to a filing deadline and the schedule for compliance activity. The summary data consists of Account Number, Tax type, period and liability amount, taken at face value. A batching scheme addresses the control of the paper flow, whilst the processing of individual documents will not be affected by the rejection of other documents in the batch.

The objective of the module is to assess the individual tax return on a fair basis, to automate the process of validation and specific checks and controls, as well as to post the information into Taxpayer and Revenue accounting module.

The accounting module allows on the basis of preliminary laid down accounting plan to be created and maintained an individual accounting plan, in reference to the accepted accounting policy and internal organization.

Revenues and expenses in the organization may be grouped in revenue and cost centers, as well as in 8 more different sections in view of detailed monitoring. Possibility for work at several cashes at the same time with different cashiers is also available. Functionality for bank statement processing, cash references, daily or periodically turnovers and movement in cash and bank accounts in all kind of currency has been implemented to control the transactions.

The system maintains the long-term assets, and also provides budget formulation and comparison to actual account figures. In addition, it provides functionality to reconcile bank statements against the revenue cashbook.

The objective of the module is to support management reporting. Budgets amounts are entered for all accounts in the revenue accounting structure. The information is consolidated at the regional level and will thus automatically provide a consolidated income statement accounts.

The Taxpayer Accounting module creates and maintains accounts for each registered securer and self-secured individual. The accounts are opened for each of the tax types. For every individual, the system generates an Informative Taxpayer and contributor (account) report, containing complete information submitted by the “Assessment – Processing declarations” module.

The module manages taxpayer tax type transactions: assessments, collections, penalties, interest calculations, taxpayer communication. Refunds are managed in this module and paid out in the Revenue Accounting Module.

The Taxpayer Accounting Module objective is the provision of validations and postings from the Assessment and Payment processing modules to the taxpayer accounts. The online validation of transactions ensures correct posting, as well as accurate balances and data integrity. The taxpayer accounting module also facilitates compliance checking for late filing or payment, whereupon penalties are calculated and demand letters issued.  Interest on outstanding balances is calculated and posted against the taxpayer accounts.  Account transfers are done electronically by the system. The debt management function manages time to pay agreements and write-offs, as well as case tracking.

The audit module is integrated into the Assessment module and provides a definitive tool for “narrowing down” the population of potential audit cases to a workable and more clearly defined representative sample. The audit module provides a number of tools to the auditors to permit them to conduct the audit in a more structured and well-documented manner.

The Risk engine is used to group taxpayers according to their complexity, size, and probability to fraudulent actions. A system operator selects taxpayers according to triggers that were set up in the system. After audit cases were selected it is allocated to officials. After a case is completed, the audit reports are captured and approved using the system. The data captured from the report is then used to calculate new severity points for a taxpayer and the complexity of a tax account are also updated.

The objective of the module is to ensure a proper tax treatment to the taxpayer, evaluating the risk groups and supporting the visibility of the tax audit process.

Objections are lodged by a taxpayer, when he does not agree with the result of an estimated assessment, revised assessment, audit assessment, etc. The Account entries that are subject to the objection are flagged and compliance actions are temporarily suspended pending the outcome of the objection. A supervisor must verify an objection entered before they take effect. Account adjustments following the outcome of the objection will automatically be applied.

A taxpayer may appeal a ruling against an objection. The process for the capture of an Appeal is the same as for an Objection, with the exception that the Appeal details are captured as per the legal documentation received.

The objective of the module is to track all the objections and appeal and to process them to the Taxpayer Account module. All sections of the system will be immediately aware of new objections, and reporting on the objection is timely and accurate.

The module scopes all processes regarding client services, including issuing of acts certifying legal facts, issuing of acts on which basis the existence of rights and obligations is accepted or rejected, implementing other administrative actions which represent legal interest for individual or legal entity. The Client services module includes issuance of documents regarding the acceptance, exercise or lapse of rights or obligations, preparation of written answers, rendering technical assistance, securing the clients with declarations, forms and other documents related to the tax legislation, providing assistance and information using different means of communication. The e-Services part of the module provides the taxpayers with access to electronic information and functionality to submit requests and returns electronically.

The module objectives are to prepare and issue the required documents (certificates) related to taxpayer’s requests or claims, to provide accurate information on time about the Taxpayer Accounting status (reports) or Health insurance status, to prepare and issue standpoints related to taxpayers inquiries, to send notifications to the person, if an event has occurred, to assist the client when filling declarations, forms and other documents meant for Tax Administration, to inform the client for amendments in law, to provide Internet access to the client with the required information, to deliver information about current procedures, to generate and maintain forms meant for filling in from liable persons (declarations, requests, claims, requests for offset and refunding of paid undue taxes).

The purpose of the File and Document Control module is registration of all documents regarding the taxpayer that it refers to and the type of the document, direction to the authorities, assignment of tasks regarding the documents (resolution), submission for implementation, output registration, and allocation in the library where they will be stored.

The module provides officials in certain departments, who have the right to use and work with documents from the library, to request them. The system specifies the period to use the requested documents and tracks their location at any given point in time. If the documents are located in another Tax regional office, the system tracks the physical dispatch of the taxpayer file to the respective location.

The objective of the module is the provision of a unique number for each document registered in the system and maintaining information about the location of the hard copy of the document in the library, including information about the document flow to/from the library.

The delinquencies module covers the automated process that analyzes accounts, detecting overdue conditions and executes compliance actions on the detected overdue conditions (e.g. penalties, letters etc.). This process is executed as part of the month end runs and analyzes all accounts for any compliance condition to be addressed. This process is also triggered when a single return or payment is posted.

The purpose of the Enforcement function is the management of arrear payment cases. Summary details of the payments are entered into the system against the taxpayers Account to inhibit calculation of penalties and interest against the taxpayer’s account. FOP will provide a notification to the system of the compliance of a taxpayer in his payment duties. This allows data entry to be somewhat delayed after lodgement, due to the time taken to enter data or due to a possible physical separation of some lodgement sites from data entry sites.