i-payout Generates Invoices For Its Clients’ Distributors In The E.U.
That’s because i-payout has a solution for the big problems that the new E.U. Invoicing Mandate has created for Direct Sellers/MLM companies and their distributors in who earn commissions in the E.U.
Ted Nuyten had a chat with Eddie Gonzalez (C.E.O./President) of i-payout about his company’s cure for the headaches that the E.U. Invoicing Mandate is creating.
Ted: Eddie, I know that your mass payment software solution is facilitating distributor payments in over 150 countries – with local currency capabilities in most of them. I know that you have numerous direct selling clients that are listed among the world’s 25 largest players. But I’m not aware of this new invoicing capability you have that keeps things simple and legal for direct sellers in the E.U.
Eddie:
Here’s some background. The EU Invoice Mandate requires virtually all purchases, payments and earnings (including those of direct selling distributors) to be digitally recorded in real time. The Mandate enables the annual collection of billions of euros in additional VAT revenue by member countries of the E.U. At present, France, Cyprus, Spain, Italy and Portugal have the financial infrastructure in place to comply with the Invoicing Mandate. The other 23 countries of the E.U. are in the process of ramping-up.
Ted: What sort of difficulties does the Invoice Mandate create for direct selling distributors in the E.U.?
Eddie: In order to legally receive their commissions, distributors working as direct sellers must prepare timely invoices that account for the income they expect to receive as a result of their own selling efforts and the combined efforts of their associated distributors. Knowing how the intricacies of the process when VAT or other taxes are to be applied is no simple matter.
Ted: And, if a direct seller doesn’t comply with the Invoice Mandate – are there penalties for non-compliance?
Eddie: The penalties are serious.
Administrative Fines: They include fines of 85 EUR per each incorrectly issued invoice or and a 2,000 EUR fine for failure to issue an invoice.
Sanctions Under Criminal Law – Including imprisonment
Protracted Audits– For both the distributors and their trading partners
Loss of Right to Deduct VAT – With an average VAT rate of 20%, this could result in a distributor, retroactively, losing more than its profit margin on a sale.
And you can bet the EU countries are serious about the invoicing mandate – there’s over 150 billion EUR that they expect to collect, annually, via VAT payments that they currently are not getting.
Ted: So, how do you and i-payout take care of the Invoicing Mandate for your clients with E.U. distributors?
Eddie: We’ve added a processing module to our commission payment platform that identifies the products and pricing from distributors sales activity and combine that with the sales activity generated by their downline (if applicable). We apply the appropriate taxes resulting from that sales activity and then issue an invoice on behalf of the distributor to their parent company for the amount the distributor is to be paid. This would be a very complex task for the distributor to comply with on their own. We actually do it for them.
Ted: Sounds like a big-time win-win to me. Both for the direct selling companies and for their independent distributors. Thanks for bringing this issue to light and, solving it.
Eddie: It’s a value-added service that, to our knowledge, no other provider of mass payments solutions is bringing to the table. We’re always searching for ways to better serve our clients. With this invoice generating solution, we have another big benefit for our clients.
About i-payout
i-payout is an award-winning financial software company that provides world-wide payment and 1099 solutions to its clients. The company, now in its 11thyear, holds a unique position among its competitors. i-payout is unmatched in its ability to customize solutions to the individual needs of its rapidly growing client list. For more information visit www.i-payout.com or write to [email protected]