Financial service and tax “robotics” (or human “robotics” in the financial sector) is closer than we think.
Even a decade ago no one believed that the classical offshore companies would die. But today, even if they are not dead yet, clinical death has occurred. This is for sure. The situation where taxes are not paid at all is no longer possible. The tax free era is virtually over.
So – taxes will have to be paid, whether we like it or not.
Four reasons that prove that we are rapidly moving towards “financial robotics”:
- The first step was the automatic exchange of information between banks, undersigned by more than 100 countries, including tax havens, such as Belize, the British Virgin Islands, Cyprus, Panama, Seychelles and others.
- Many countries have set limits for cash transactions, so that transactions made through bank accounts are easy to track and control. Besides, many businesses, including retail stores, are switching to electronic billing only.
- The idea of tax equalisation within the European Union was already proposed several years ago. Sooner or later it will happen, and then businessmen will no longer need to choose another country for the registration of their company instead of the one where economic activity is actually carried out. Everyone will be equal.
- Several countries are working on enabling the SRS to collect taxes itself directly from the bank account of the business, based on the documents that the businessman has filed with the SRS.
Looking ahead, it must be concluded that, if all of these instruments are applied properly, in doing business the new generation will no longer have to think about taxes, hire an accountant and spend a lot of hours planning their tax expenditure and drafting the reports. But…
What might this look like?
All transactions will take place online, possibly even face-to-face on the SRS website. Why would the accountant need to input data in their own systems and then prepare the reports for the SRS? Upon entering documents directly into the system of the SRS, all the necessary reports will be created automatically.
All the transfers will be seen, as well as the issued and received invoices. For those operating in international markets, all countries involved will see what transactions pertain to them and will withhold all taxes due to them themselves.
There will be no cash, no tax differences (at least within the EU), there will be a complete and rapid exchange of information between banks around the world, thus providing a real time picture of the situation in the company or private individual accounts and the possibility that the SRS will withhold taxes online from income abroad as well. This will eliminate the option of hiding in one of the lower tax countries.
We will establish companies online, in any country of the world. We will open bank accounts in exactly the same way. Taxes will be withheld automatically and reports will be generated automatically. And…
What does this mean?
The new generation will no longer have to think about taxes – how to pay and reduce them, where to open the business and where it is better to keep money. Money … or Bitcoin … It seems unlikely that young people will know what paper money is soon.
Whether this is good or bad, depends on how it will work. If applied correctly, this would make the life and work of business people a lot easier in general because taxes would become something self-evident and invisible, like, for example, electricity. Everyone is using it and paying for it, without even thinking that it could probably be produced cheaper or used less frequently, if using candle light.
How soon may this change be expected? The next 3 years will bring great changes to us.