Participation in a volunteer agreement (VDA) may be something you should consider if you haven`t signed up to collect in a state where you should have it. But is a VDA what you need? In talking with our customers, we know that there are a lot of questions regarding VDAs. To answer some of these questions and help you decide if a VDA is right for you, read on to unmask four common misunderstandings about VDAs. Virginia Department of Taxation Voluntary Disclosure Program P. O. Box 5640 Richmond, VA 23220 or call: 804.225.3560 E-mail email@example.com If a company`s Voluntary Disclosure Agreement or VDA is accepted, there are strict deadlines that must be met to obtain all the benefits of the Voluntary Disclosure Agreement program. Remember that a voluntary disclosure agreement is a legal agreement between the company and the state. So there are very clear results that need to be provided by the company, as well as a strict timeline as to when these items are to be made available. Like almost everything in sales and use tax, these timelines vary from state to state, but an expert revenue tax advisor will know these timelines and be certain that their client will meet them. A nexus and tax study allows a business to determine if it may be exposed to unpaid tax risk.
Many countries offer volunteer advertising programs that reduce or eliminate penalties or interest on the state`s or country`s past tax debts. These programs often limit the number of years a state can look back to determine what taxes are owing. VDAs reward voluntary compliance. If you`re waiting for a state to ”catch” you to introduce yourself, don`t really sign up voluntarily, so the same benefits don`t apply. In addition to VDAs, a company can benefit from other tax reduction strategies. Depending on fiscal sovereignty and the specific facts and circumstances of a taxpayer, states may propose amnesty programs or negotiated conclusion agreements. In addition, a company may be able to reduce VAT debt by drawing customer exemption certificates or by demonstrating that customers have already paid usage taxes on the products sold. In voluntary agreements, most states allow a company to estimate its past commitments, simplifying the process.
With a few exceptions, Excel calendars for calculating tax commitments are accepted instead of the presentation of all previous VAT returns. States are prepared to make such concessions to facilitate the process, since the main objective of States is to promote voluntary compliance with future and ongoing collection and reporting obligations. In short, the state is willing to forego some of the formalities and even some revenue to attract new taxpayers to the herd.