European VAT compliance check-list
14 May, 2017
VAT compliance to-do list in January
If your department is handling multiple VAT numbers across Europe from one same location, you must take a number of actions at the beginning of each year to make sure that you are on top of all your VAT obligations. Therefore, we summarized below what we believe should be the top priorities of your team in this easy-to-read VAT compliance check-list. Of course, depending on the volumes and industry of your business, additional checks may be required.
In Marosa, we have templates and process documents ready for the below actions. Please send us an email to get help establishing a robust process to meet all VAT compliance obligations.
VAT compliance due date tracker
Where you have several VAT numbers in multiple countries, you need a list of all reporting obligations during the year. This list will have one line per obligation and include the entity, country, reporting period, due date and other relevant information helping you to establish who is responsible for the return and when the work should get started.
To create your due date tracker, you need an overview of all applicable deadlines for each type of return in every European country. You should also take into account weekends and public holidays, as they often deviate the final due date. Please send us an email if you want to receive this information free of charge.
Intrastat returns are due when the volume of your IC-acquisitions or IC-sales exceeds a certain threshold. This threshold is different in each EU country, you can find the updated 2018 list on our website.
The correct time period should be selected when calculating your Intrastat thresholds. These are computed for a complete calendar year (from January to December). For example, if you exceed the threshold in May 2017, you must complete the year January to December 2018 below the threshold in order to stop filing these returns (in January 2019).
Frequency of filing VAT returns
Every country has different rules to determine how often you submit VAT or ESL returns. Some jurisdictions take into account turnover, some others consider only the VAT due and certain countries take the VAT position as the factor determining your returns frequency. For example, you must change into monthly VAT returns if:
- Your annual VAT payable in Germany during 2016 was above €7,500.
- Your annual turnover in Spain exceeded €6M during 2016.
- Your annual VAT payable in France in 2016 was above €4,000.
These are only some examples. Our team has readily available information on the frequency of filing VAT and ESL returns in all European countries. You can also find these rules in our Country VAT Manuals for those jurisdictions already covered.
It is very important that your VAT returns are submitted for the correct period to avoid late filing and late payment penalties. Because the thresholds are often computed on an annual basis, your team must review all VAT numbers for which you are submitting returns to ensure that you cover the right period.
Ready for 2017 changes?
A number of important changes became effective on January 2017 or will become effective early this year. Here is a summary of the changes affecting VAT compliance:
- Italian VAT returns and electronic ledgers.
- Polish monthly VAT returns required.
- Also in Poland, e-filing is now mandatory.
- Spanish real-time reporting as from July 2017.
- Finland no longer allows paper VAT returns and the rules on frequency of returns have changed.
- Romanian VAT rate changes.
- Deadline changes on German annual VAT returns.
These are only some examples of changes impacting VAT returns. Your business should check if there were any other changes applicable to your industry affecting your tax reporting function.