Table of Contents

About the Editor ...............................................................................................

v

Foreword ............................................................................................................

xv

Part 1 General Section 1

About this Guide .......................................................................................

1-3

2

Background to VAT in Europe ............................................................... A. Principles of the VAT .......................................................................... B. VAT in the European Community (Pre-1993) ................................... C. The European Union and Its VAT System (Post-1993) .....................

2-1 2-2 2-4 2-5

3

VAT Treatment of Transactions ............................................................. A. Define your Transactions to Determine your VAT Compliance Needs B. Typical Transactions and Their VAT Treatment ............................... C. Supply of Goods: Overview ................................................................ D. Supply of Goods: Domestic Supply .................................................... E. Supply of Goods: Exports .................................................................... F. Supply of Goods: Intra-Community Supply ....................................... G. Purchase of Goods: Domestic Purchase .............................................. H. Purchase of Goods: Imports ................................................................ I. Purchase of Goods: Intra-Community Acquisition of Goods ............ J. Supply and Purchase of Services ........................................................ K. Supply and Purchase of Services: Exceptions B2C and B2B ............ L. Supply and Purchase of Services: Exceptions B2C only ...................

3-1 3-2 3-4 3-5 3-6 3-8 3-9 3-11 3-12 3-13 3-14 3-15 3-16

4

VAT Rates in the EU ................................................................................ A. VAT Rates in the EU: Framework ..................................................... B. List of VAT Rates Applied in the Member States (Including Norway and Switzerland) (1 February 2015) .....................................

4-1 4-2

Specialized Areas in Cross-Border Trade .............................................. A. Registration Needs for Distance Sales ................................................ B. Registration Needs for Supply with Assembly ................................... C. Avoiding Registrations for Occasional Transactions and Low Volumes ................................................................................................ D. Avoiding Registrations through Triangulation Simplification ........... E. Avoiding Registrations through Consignment or Call-Off Stock Simplification .......................................................................................

5-1 5-2 5-5

5

vii

4-3

5-6 5-7 5-9

Table of Contents F.

Avoiding Registrations through Registers of Temporary Movements: Introduction ..................................................................... G. Avoiding Registrations through Registers of Temporary Movements: Movements That Can Be Recorded through These Registers ........... H. Avoiding Registrations through Registers of Temporary Movements: Example of Entries in Register of Temporary Movements ............... 6

The System of VAT Registration ............................................................ A. European VAT Reporting through Multiple VAT Registrations ....... B. The Purpose of a VAT Registration ................................................... C. VAT Number Format and Best Practices in Validity Checks ........... D. Mini One Stop Shop (MOSS) Scheme Affecting VAT Registrations (as from 1 January 2015) for Telecommunications, Broadcasting and Electronic Services Supplied within the EU ....................................... E. Registration as a Locally Established Company versus as a Non-established Company ................................................................... F. Locally Established Subsidiaries and Traders .................................... G. Non-established Companies ................................................................. H. Is a Local Presence or Branch Office Needed to Register a Non-established Company? ................................................................. I. Does the VAT Registration of a Non-established Company Entail Any Local Corporate Taxation Consequences? ....................... J. Should One Appoint a Fiscal Representative to Register a Non-established Company? ................................................................. K. Who Acts as Fiscal Representative? ................................................... L. Are the VAT Accounting Requirements of a Non-established Company Comparable to Those of Local Companies? ...................... M. How Does a Company Register for the VAT? ................................... N. How Long Does a VAT Registration Take? ...................................... O. Samples of VAT Registration Documents ..........................................

5-12 5-13 5-14 6-1 6-3 6-5 6-6

6-9 6-11 6-12 6-13 6-14 6-15 6-16 6-20 6-21 6-22 6-24 6-25

7

VAT Registration: Special Areas of Concern ....................................... A. VAT Grouping ..................................................................................... B. How Does the VAT Group Report? .................................................... C. Can Non-resident Companies Be Members of a VAT Group? ......... D. Anti-avoidance Rules for VAT Groups .............................................. E. Collective VAT Numbers .................................................................... F. Bonded Warehouses and VAT Warehouses .......................................

7-1 7-2 7-3 7-5 7-6 7-8 7-9

8

VAT Accounting Obligations ................................................................... A. Basic Accounting Obligations .............................................................

8-1 8-2

9

VAT Invoicing Requirements .................................................................. A. The Importance of Invoices ................................................................. B. Who Is Obliged to Invoice? ................................................................ C. Self-Billing and Outsourcing of Invoicing ..........................................

9-1 9-2 9-4 9-5

viii

Table of Contents D. Mandatory Invoice Requirements ........................................................ E. E-Invoicing ........................................................................................... F. Invoice Sample (for informative purposes only, to be drafted in function of the transaction and according to country specific invoicing requirements) .......................................................................

9-10

10 Recordkeeping Requirements .................................................................. A. Books and Records to Keep ................................................................ B. Retention Periods and Storage Location .............................................

10-1 10-2 10-7

11 Periodic VAT Reporting Obligations ..................................................... A. An Overview of the Periodical Returns .............................................. B. What Is Declared in the VAT Return? ............................................... C. The Reporting Periods and the Submission Deadlines ...................... D. Paper versus Electronic Returns .......................................................... E. Nil Returns ........................................................................................... F. Corrections in the VAT Returns ......................................................... G. VAT Payments ..................................................................................... H. Table: Local Bank Account Requirements for VAT Payments by Non-established Companies ........................................................... I. VAT Refunds ....................................................................................... J. Cash Flow Improving Licenses and Regimes ..................................... K. European Sales Lists (ESL) ................................................................. L. European Purchase Lists (EPL) ........................................................... M. Summarizing Annual Returns .............................................................. N. Annual Sales (and Purchases) Lists ....................................................

11-1 11-2 11-3 11-4 11-6 11-7 11-8 11-9

12 Periodic Intrastat Declarations ................................................................ A. What Is Intrastat? ................................................................................. B. Why Is Information about Trade among EU Member States Needed? ................................................................................................ C. Goods Movement Reported in Intrastat .............................................. D. Intrastat Exclusions .............................................................................. E. Countries of Reporting, Traders Concerned and Threshold ............... F. Intrastat Periods and Submission Deadlines ....................................... G. Paper Intrastat Returns ......................................................................... H. Electronic Intrastat Returns ................................................................. I. Links between the Intrastat and the VAT System .............................. J. Overview of the Data Elements Reported in Intrastat ....................... K. Period of Reporting .............................................................................. L. Corrections ........................................................................................... M. Nil Returns ........................................................................................... N. Penalties for Not Respecting the Intrastat Obligation ........................ O. German Intrastat Form (Example) ......................................................

ix

9-6 9-9

11-11 11-13 11-16 11-18 11-19 11-20 11-21 12-1 12-2 12-3 12-4 12-5 12-7 12-9 12-10 12-11 12-12 12-14 12-18 12-19 12-20 12-21 12-22

Table of Contents 13 VAT Audits ................................................................................................ A. What Is a VAT Audit? ........................................................................ B. How Are Companies Selected for Audit? ........................................... C. Screening Tax Returns ......................................................................... D. Projects on Business Sectors ............................................................... E. Requests for VAT Refunds .................................................................. F. Random Selection ................................................................................ G. What Form Will the Audit Take? ....................................................... H. Main Points of Attention during VAT Audits .................................... I. Completeness of the Transactions Declared ....................................... J. Entitlement to the VAT Recovery Claimed ....................................... K. Entitlement to the VAT Exemptions ................................................... 14 Proving VAT Exemptions for Exports and Intra-Community Supplies ....................................................................................................... A. The Importance of Storing Proof of Exports ...................................... B. Proving Exports Electronically: The Export Control System (ECS) .................................................................................................... C. Proving Exports with Paper Export Documents ................................. D. Archiving of Export Declarations ....................................................... E. Proving VAT Exemption for Intra-Community Supplies .................. F. Proving Intra-Community Supplies: Evidence of Dispatch to Another Member State .................................................................... G. Importance of Incoterms ...................................................................... 15 VAT Refunds for Non-registered Companies ....................................... A. Refund of Foreign VAT to EU Business: Directive 228/09/EC ........ B. Refund of Foreign VAT to Non-EU Business: 13th Directive Claims ................................................................................................... C. Table: Minimum Amounts of Recovery for Non-EU Businesses (2014 Info) ............................................................................................ D. Overview of the VAT Deduction Limits in the EU Member States for Non-established Companies (2014 info) .......................................

13-1 13-2 13-3 13-4 13-5 13-6 13-7 13-8 13-10 13-11 13-12 13-13 14-1 14-2 14-3 14-5 14-8 14-9 14-10 14-16 15-1 15-2 15-6 15-8 15-10

Part 2 VAT Compliance Procedures Austria ................................................................................................................ Section 1. Defining the Need to Register ............................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

AT-3 AT-5 AT-11 AT-12 AT-14

Belgium ............................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives ....................

BE-1 BE-4 BE-10

x

Table of Contents Section 3. Section 4.

VAT Registration and Deregistration .................................... VAT, ESL and Intrastat Reporting Obligations ....................

BE-11 BE-13

Bulgaria .............................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

BG-1 BG-4 BG-7 BG-8 BG-11

Croatia ................................................................................................................ Section 1. Defining the Need to Register ............................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT, ESL and Intrastat Reporting Obligations ....................

HR-1 HR-3 HR-7 HR-8

Cyprus ................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

CY-1 CY-4 CY-7 CY-8 CY-10

Czech Republic .................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

CZ-1 CZ-4 CZ-10 CZ-11 CZ-13

Denmark ............................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

DK-1 DK-4 DK-8 DK-9 DK-11

Estonia ................................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

EE-1 EE-4 EE-8 EE-9 EE-11

Finland ................................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

FI-1 FI-4 FI-10 FI-11 FI-13

xi

Table of Contents France ................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT-Registration and Deregistration .................................... Section 4. VAT and European Sales Listing (ESL)/Intrastat (DEB) Reporting Obligations .............................................................

FR-11

Germany ............................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

DE-1 DE-4 DE-9 DE-10 DE-12

Greece ................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESPL, Intrastat and ASPL Reporting Obligations ......

EL-1 EL-4 EL-7 EL-8 EL-10

Hungary .............................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

HU-1 HU-4 HU-11 HU-12 HU-14

Iceland ................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

IS-1 IS-3 IS-6 IS-7 IS-9

Ireland ................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

IE-1 IE-4 IE-9 IE-10 IE-12

Italy ..................................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

IT-1 IT-4 IT-10 IT-11 IT-13

Latvia .................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives ....................

LV-1 LV-4 LV-8

xii

FR-1 FR-3 FR-8 FR-9

Table of Contents Section 3. Section 4.

VAT Registration and Deregistration .................................... VAT, ESL and Intrastat Reporting Obligations ....................

LV-9 LV-11

Lithuania ............................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Fiscal Representatives ............................................................ Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

LT-1 LT-4 LT-9 LT-10 LT-12

Luxembourg ....................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

LU-1 LU-4 LU-8 LU-9 LU-11

Malta ................................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

MT-1 MT-4 MT-7 MT-8 MT-10

The Netherlands ................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT and Intrastat Reporting Obligations ..............................

NL-1 NL-3 NL-8 NL-9 NL-11

Norway ................................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

NO-1 NO-3 NO-6 NO-7 NO-9

Poland ................................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

PL-1 PL-4 PL-9 PL-10 PL-12

Portugal .............................................................................................................. Section 1. VAT Registration .................................................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL, ASPL and Intrastat Reporting Obligations ........

PT-1 PT-4 PT-8 PT-9 PT-11

xiii

Table of Contents Romania .............................................................................................................. Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL, Intrastat and Semi-ASPL Reporting Obligations ..............................................................................

RO-13

Slovakia ............................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

SK-1 SK-4 SK-9 SK-10 SK-12

Slovenia ............................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

SI-1 SI-4 SI-10 SI-11 SI-13

Spain ................................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESPL, ASPL and Intrastat Reporting Obligations ......

ES-1 ES-4 ES-9 ES-10 ES-12

Sweden ................................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration .................................................................... Section 4. VAT, ESL and Intrastat Reporting Obligations ....................

SE-1 SE-4 SE-8 SE-9 SE-11

Switzerland ......................................................................................................... Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT and Intrastat Reporting Obligations ..............................

CH-1 CH-3 CH-6 CH-7 CH-10

United Kingdom ................................................................................................ Section 1. The Obligation to VAT-Register ........................................... Section 2. Requirements regarding Fiscal Representatives .................... Section 3. VAT Registration and Deregistration .................................... Section 4. VAT, ESL, RCSL and Intrastat Reporting Obligations ........

UK-1 UK-4 UK-10 UK-11 UK-13

xiv

RO-1 RO-4 RO-9 RO-10