What are continuous transaction controls (CTC)?
Continuous transaction controls (CTC) are tax rules under which businesses send invoice or transaction data to the tax authority electronically when each transaction happens, instead of only in periodic returns. In a clearance model the authority validates the invoice before it reaches the buyer; in a reporting model the data is sent at or shortly after issue.
Also calledCTCreal-time reportingclearance e-invoicinge-reporting
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- Data sent
- Per transaction, as it happens
- Models
- Clearance and real-time reporting
- Examples
- Italy SDI, Poland KSeF, Spain SII
How continuous transaction controls work
CTC began in Latin America and spread to Europe and Asia. In the clearance model, used by Italy's SDI, Poland's KSeF and India's invoice registration portals, the seller submits each invoice to a government platform that checks it, assigns an identifier and releases it to the buyer; the cleared invoice is the legal one. In reporting models, such as Spain's SII and the e-reporting planned in France and Belgium, invoices travel between the businesses, often over Peppol, and the data is reported to the authority at or soon after issue. Some systems combine both. For finance teams CTC moves tax checks to the moment of invoicing, so master data, tax codes and invoice formats must be right before an invoice can be issued. Fonoa and Avalara connect one ERP to many countries' CTC systems.
Common questions
What is the difference between clearance and reporting?+
In clearance, the tax authority's platform validates each invoice before the buyer receives it. In reporting, the invoice goes straight to the buyer and its data is sent to the authority at the same time or shortly after.
Is CTC the same as e-invoicing?+
They overlap but are not the same. E-invoicing is the structured invoice exchanged between businesses; CTC is the transmission of transaction data to the tax authority, which many countries now combine with e-invoicing.
Why are tax authorities introducing CTC?+
To see VAT and sales data as it happens, which helps close the gap between tax due and tax collected, and to pre-fill returns.
Software for continuous transaction controls
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