VAT Reporting Guide
Where your business is registered for VAT, your business will need to ensure that it is complying with local VAT reporting obligations.
Once registered for VAT in an EU country, your business will need to submit regular VAT returns to the appropriate local tax authority. VAT reporting rules vary between countries, so in order avoid fines and penalties being imposed for non-compliance, it is crucial that you are aware of the rules for each country in which you trade.
In order to comply with local VAT compliance obligations, you will need to:
- Ensure sales invoices comply with local guidelines
- Report sales and purchases on your VAT return with appropriate local VAT treatment
- Liaise with the local tax authority in response to questions regarding your ongoing business activity
- Make payments to local country tax authorities where VAT is due
- Have local bank accounts to make/receive payments in countries where a local account is required
Standard filing frequencies for VAT returns vary between countries; you may need to file monthly, quarterly, bi-annually and/or annually. In addition, frequencies may be subject to change depending on a number of factors including turnover, and whether you are in a payment or repayment position with the tax authorities. It is crucial that you understand local VAT legislation to ensure you are filing correctly. In addition, some countries offer the option to nominate preferred filing frequencies, which may potentially improve cash-flow where you are reclaiming local VAT through the return.
It is important that when making supplies you are aware of the correct liability on your invoices to avoid incorrectly charging VAT to your clients, which often causes cash-flow issues if invoices are disputed. In addition, where you receive invoices with VAT, it is vital you are confident that the VAT was charged to you correctly – if you pay VAT that was incorrectly charged, it may be difficult to recover.
Things to consider include:
- Customer information
- Supplier information
- Transaction details
- The Reverse Charge
Tax Authority Payments
VAT inspections are carried out periodically at the discretion of the tax authorities. It is important to ensure that your business is complying with local VAT obligations to ensure risks of fines and penalties.
Intrastat reporting is a requirement for companies that trade across EU borders. It monitors the movement of goods between EU Member States and the data collected enables EU countries to compile important trade statistics to monitor cross-border transactions.
Ensure your business is getting Intrastat right:
- Review your international trade and identify where you need to file intrastat reports
- There are two types of Intrastat reports: Arrivals and Dispatches – make sure you are aware of which reports you need to file
- It is vital that commodity codes used in your reports are correct, so it may be necessary to review your supplies to identify correct codes
- Information required for Intrastat reporting varies between countries, information required for reporting may include details of:
- Means of transporting goods
- Nature of transaction
- Exchange rates
EC Sales Lists
If you are an EU VAT-registered business trading with other VAT registered businesses across the EU, it may be necessary for you to produce regular EC Sales Lists to report the value of sales being made. The reports provide tax authorities with vital information to ensure VAT is being correctly accounted by businesses trading cross-border. Unlike Intrastat reports, which monitor the movement of goods only, EC Sales Lists report the supply of services that have been made cross-border, as well as all goods.
Ensure your business is getting EC Sales Lists right:
- Review your international trade and identify where you need to file EC Sales List reports
- EC Sales Lists show the value of your trade within the EU to individual VAT numbers, so it is crucial that VAT numbers used are correct
- EC Sales reports vary between countries – you may be required to report only sales, but in some countries purchases will also need to be included
- Reports require that the value of transactions relating to goods and services are broken down and the net values reported