About the Editor Foreword v XV Part 1 General Section About this Guide 1-3 Background to the VAT in Europe 2-1 A. Principles of the VAT 2-2 B. VAT in the European Community 2-4 C. The European Union and Its VAT System (Post-1993) 2-5 VAT Treatment of Transactions 3-1 A. Define Your Transactions to Determine Your VAT Compliance Needs 3-2 B. Typical Transactions and Their VAT Treatment 3-4 C. Supply of Goods: Overview 3-5 D. Supply of Goods: Domestic Supply 3-6 E. Supply of Goods: 3-9 F. Supply of Goods: Supply 3-10 G. Purchase of Goods: Domestic Purchase 3-12 H. Purchase of Goods: Imports 3-13 I. Purchase of Goods: Intra-Community Acquisition of Goods 3-14 J. Supply and Purchase of Services 3-15 K. Supply and Purchase of Services: Exceptions B2C and B2B 3-17 L. Supply and Purchase of Services: Exceptions B2C only 3-19 VAT Rates in the EU 4-1 A. VAT Rates in the EU: An Overview 4-2 B. Table: List of VAT Rates Applied in the Member States 4-3 Specialized Areas in Cross-Border Trade 5-1 A. Registration Needs for Distance Sales 5-2 B. Registration Needs for Supply with Assembly 5-5 C. Avoiding Registrations for Occasional Transactions and Low Volumes 5-6 D. Avoiding Registrations through Triangulation Simplification 5-7 E. Avoiding Registrations through Consignment or Call-Off Stock Simplification 5-9 F. Avoiding Registrations through Registers of Temporary Movements: Introduction 5-12 Quick reference to European VAT compliance 2013 VII digitalisiert durch: IDS Luzern
G. Avoiding Registrations through Registers of Temporary Movements: Movements That Can Be Recorded through These Registers 5-13 H. Avoiding Registrations through Registers of Temporary Movements: Example of Entries in Register of Temporary Movements 5-14 The System of VAT Registration 6-1 A. European VAT Reporting through Multiple VAT Registrations 6-3 B. The Purpose of a VAT Registration 6-5 C. VAT Number Format and Best Practices in Validity Checks 6-6 D. One Stop Shop VAT Registration for Radio and Television Broadcasting Services and Certain Electronically Supplied Services: B2C 6-9 E. Registration as a Locally Established Company versus as a Non-established Company 6-11 F. Locally Established Subsidiaries and Traders 6-12 G. Non-established Companies 6-13 H. Is a Local Presence or Branch Office Needed to Register a Non-established Company? 6-14 I. Does the VAT Registration of a Non-established Company Entail Any Local Corporate Taxation Consequences? 6-15 J. Should One Appoint a Fiscal Representative to Register a Non-established Company? 6-16 K. Who Acts as Fiscal Representative? 6-20 L. Are the VAT Accounting Requirements of a Non-established Company Comparable to Those of Local Companies? 6-21 M. How Does a Company Register for the VAT? 6-22 N. How Long Does a VAT Registration Take? 6-25 VAT Registration: Special Areas of Concern 7-1 A. VAT Grouping 7-2 B. How Does the VAT Group Report? 7-3 C. Can Non-resident Companies Be Members of a VAT Group? 7-4 D. Collective VAT Numbers 7-5 E. Bonded Warehouses and VAT Warehouses 7-6 VAT Accounting Obligations 8-1 A. Basic Accounting Obligations 8-2 VAT Invoicing Requirements 9-1 A. The Importance of Invoices 9-2 B. Who Is Obliged to Invoice? 9-4 C. Self-Billing and Outsourcing of Invoicing 9-5 D. Mandatory Invoice Requirements 9-6 E. 9-10 VIII
10 Recordkeeping Requirements 10-1 A. Books and Records to Keep 10-2 B. Retention Periods and Storage Location 10-5 11 Periodic VAT Reporting Obligations A. An Overview of the Periodical Returns 11-2 B. What Is Declared in the VAT Return? C. The Periods and the Submission Deadlines 11-4 D. Paper versus Electronic Returns 11-6 E. Nil Returns 11-7 F. Corrections in the VAT Returns 11-12 G. VAT Payments H. Table: Local Bank Account Requirements for VAT Payments by Non-established Companies I. VAT Refunds J. Table: Local Bank Account Requirements for VAT Refunds K. Cash Flow Improving Licenses and Regimes L. European Sales Lists 11-23 M. European Purchase Lists N. Summarizing Annual Returns 11-25 Annual Sales (and Purchases) Lists 11-26 12 Periodic Intrastat Declarations 12-1 A. What Is Intrastat? 12-2 B. Why Is Information about Trade among EU Member States Needed? 12-3 C. Goods Movement Reported in Intrastat 12-4 D. Intrastat Exclusions 12-5 E. Countries of Reporting, Traders Concerned and Threshold 12-7 F. Intrastat Periods and Submission Deadlines 12-9 G. Paper Intrastat Returns 12-10 H. Electronic Intrastat Returns 12-11 The IDEP/CN8 Software Package 12-12 J. Links between the Intrastat and the VAT System 12-14 K. Overview of the Data Elements in Intrastat 12-16 L. Period of Reporting 12-20 M. Corrections 12-21 N. Nil Returns 12-22 Penalties for Not Respecting the Intrastat Obligation 12-23 13 VAT Audits 13-1 A. What Is a VAT Audit? 13-2 B. How Are Companies Selected for Audit? 13-3 C. Screening Tax Returns 13-4 D. Projects on Business Sectors 13-5 Requests for VAT Refunds 13-6 IX
F. Random Selection 13-7 G. What Form Will the Audit Take? 13-8 H. Main Points of Attention during VAT Audits 13-9 I. Completeness of the Transactions Declared 13-10 J. Entitlement to the VAT Recovery Claimed 13-11 K. Entitlement to the VAT Exemptions 13-12 14 Proving VAT Exemptions for Exports and Intra-Community Supplies 14-1 A. The Importance of Storing Proof of Exports and 14-2 B. Proving Exports Electronically: The Export Control System (ECS) 14-3 C. Proving Exports with Paper Export Documents 14-5 D. Example Document: Export Document: Copy 3 of the SAD 14-7 E. Archiving of Export Declarations 14-8 F. Proving Intra-Community Supplies: Conditions for VAT Exempt... 14-9 G. Proving Intra-Community Supplies: Evidence of Dispatch to Another Member State 14-10 H. Example Document: CMR Transport Document 14-13 15 VAT Refunds for Non-registered Companies 15-1 A. Refund of Foreign VAT to EU Business: Directive 15-2 B. Refund of Foreign VAT to Non-EU Business: 13th Directive Claims 15-6 C. Table: Minimum Amounts of Recovery for Non-EU Businesses D. Example Document: Standard Refund Claim Form 15-10 E. Example Document: Certificate of VAT Status 15-12 F. Overview of the VAT Deduction Limits in the EU Member States for Non-established Companies 15-13 2 VAT Compliance Procedures Austria AT-3 Section 1. Defining the Need to Register AT-6 Belgium BE-4
Bulgaria BG-4 BG-7 BG-8 Cyprus CY-4 CY-7 CY-8 Czech Republic CZ-4 Denmark DK-4 DK-8 DK-9 Estonia EE-4 EE-7 EE-8 Finland Section 1. Section 2. Section 3. Section 4. The Obligation to VAT-Register Requirements Regarding Fiscal Representatives VAT Registration and Deregistration VAT, ESL and Intrastat Reporting Obligations France FR-3 FR-8 Section 3. VAT-Registration and Deregistration FR-9 Section 4. VAT and European Sales Listing (ESL)/Intrastat (DEB) Reporting Obligations Germany DE-4 DE-8 XI
DE-9 Section 4. ESL and Intrastat Reporting Obligations Greece EL-4 EL-7 EL-8 Section 4. VAT, ESPL, Intrastat and ASPL Reporting Obligations Hungary Section 4. ESL and Intrastat Reporting Obligations HU-4 Iceland Ireland Italy LV-4 LV-8 LV-9 Lithuania LT-4 Section 2. Fiscal Representatives LT-9 XII
Luxembourg LU-4 LU-8 LU-9 Malta MT-4 MT-7 MT-8 The Netherlands NL-3 NL-8 Section 4. VAT and Intrastat Reporting Obligations Norway Section 1. Section 2. Section 3. Section 4. The Obligation to VAT-Register Requirements Regarding Fiscal Representatives VAT Registration and Deregistration VAT, ESL and Intrastat Reporting Obligations Poland PL-4 PL-9 Portugal Section 1. VAT Registration PT-4 PT-8 PT-9 Section 4. VAT, ESL, ASPL and Intrastat Reporting Obligations Romania Section 4. VAT, ESL, Intrastat and Reporting Obligations Slovakia SK-4 SK-9 XIII
Section 4. VAT, ESL and Intrastat Obligations Slovenia Section 1. Section 2. Section 3. Section 4. The Obligation to VAT-Register Requirements Regarding Fiscal Representatives VAT Registration and Deregistration VAT, ESL and Intrastat Reporting Obligations Spain ES-4 ES-9 Section 4. VAT, ESPL, ASPL and Intrastat Reporting Obligations Sweden SE-4 SE-8 Section 3. VAT Registration SE-9 Section 4. ESL and Intrastat Reporting Obligations Switzerland CH-3 CH-6 CH-7 Section 4. VAT and Intrastat Reporting Obligations United Kingdom UK-4 UK-9 Section 4. VAT, ESL, RCSL and Intrastat Reporting Obligations XIV