KLUWER LAW INTERNATIONAL 2010 QUICK REFERENCE TO EUROPEAN VAT COMPLIANCE Chris Platteeuw and Pedro Pestana De Silva (eds) Wolters Kluwer Law & Business AUSTIN BOSTON CHICAGO NEW YORK THE NETHERLANDS
Foreword xv Part 1 General Section 1 About this Guide 1-3 2 Background to the VAT in Europe 2-1 A. Principles of the VAT 2-2 B. VAT in the European Community (Pre-1993) 2-4 C. The European Union and its VAT System (Post-1993) 2-5 3 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: Exports 3-9 F. Supply of Goods: Intra-Community Supply 3-10 G. Purchase of Goods: Domestic Sale and 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 in 2010: Exceptions B2C andb2b 3-17 L. Supply and Purchase of Services in 2010: Exceptions B2C only 3-19 M. Supply and Purchase of Services in 2009 3-20 4 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 5 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 vii
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. E-Invoicing 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 11-1 A. An Overview of the Periodical Returns : 11-2 B. What Is Declared in the VAT Return? 11-3 C. The Reporting 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 11-8 G. VAT Payments 11-9 H. Table: Local Bank Account Requirements for VAT Payments by Non-established Companies 11-10 I. VAT Refunds 11-12 J. Table: Local Bank Account Requirements for VAT Refunds 11-14 K. Cash Flow Improving Licenses and Regimes 11-17 L. European Sales Lists 11-19 M. European Purchase Lists.':. 11-20 N. Summarizing Annual Returns 11-21 0. Annual Sales (and Purchases) Lists 11-22 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 1. The IDEP/CN8 Software Package 12-12 J. Links between the Intrastat and the VAT System 12-14 K. Overview of the Data Elements Reported in Intrastat 12-16 L. Period of Reporting 12-20 M. Corrections 12-21 N. Nil Returns 12-22 O. 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 E. 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 IC-Supplies 14-2 B. Proving Exports with Paper Export Documents 14-3 C. Example Document: Export Document - Copy 3 of the SAD 14-4 D. Proving Exports Electronically: The Future Export Control System (ECS) 14-5 E. Proving Intra-Community Dispatches: Conditions for VAT Exempt 14-7 F. Proving Intra-Community Dispatches: Evidence of Dispatch to Another Member State 14-8 G. Example Document: CMR Transport Document 14-11 15 VAT Refunds for Non-registered Companies 15-1 A. Refund of Foreign VAT to EU Business: 8th Directive Claims 15-2 B. Refund of Foreign VAT to Non-EU Business: 13th Directive Claims 15-4 C. Making 8th or 13th Directive Claims 15-5 D. Table: Minimum Amounts of Recovery 15-7 E. Table: Repayment Periods 15-9 F. Example Document: Standard Refund Claim Form 15-11 G. Example Document: Certificate of VAT Status 15-13 16 Place of Supply: New Rules and Requirements 16-1 A. The 2010-2015 'VAT Package' 16-2 B. Place of Supply: New Basic Rule 16-3 C. Exceptions for B2B and B2C Transactions 16-4 D. Impact of B2B Exceptions 16-5 E. A New ESL Obligation for Services 16-6 F. Exceptions for B2C Transactions Only 16-8 G. Refunds of VAT Incurred in Other Member States 16-9 Part 2 VAT Compliance Procedures Austria AT-3 Section 1. Defining the Need to Register AT-6 AT-10 AT-11 AT-13
Belgium BE-1 BE-4 BE-10 BE-11 BE-13 Bulgaria BG-1 BG-4 Section 2. Requirements Regarding Fiscal Representatives BG-7 BG-8 BG-11 Cyprus Section 4. VAT, ESL and Intrastat Reporting Obligations Czech Republic CY-1 CY-4 CY-7 CY-8 CY-10 CZ-1 CZ-4 CZ-9 CZ-10 CZ-12 Denmark DK-1 DK-4 DK-7 DK-8 DK-10 Estonia Finland France EE-1 EE-4 EE-7 EE-8 EE-10 FI-1 FI-4 FI-10 FI-11 FI-13 FR-1 FR-3 FR-8 XI
Section 3. VAT-Registration and Deregistration Section 4. VAT and European Sales Listing (ESL)/Intrastat (DEB) Reporting Obligations FR-9 FR-11 Germany DE-1 DE-4 DE-7 Section 3. VAT Registration,and Deregistration DE-8 DE-10 Greece *. EL-1 EL-4 EL-6 EL-7 Section 4. VAT, ESPL, Intrastat and ASPL Reporting Obligations EL-9 Hungary HU-1 Section 1. The.Obligation to VAT-Register HU-4 HU-9 HU-10 HU-12 Iceland IS-1 IS-3 IS-6 IS-7 IS-9 Ireland IE-1 IE-4 IE-9 IE-10 IE-12 Italy IT-1 Section If The Obligation to VAT-Register IT-3 IT-7 IT-8 IT-10 Latvia LV-1 LV-4 LV-8 LV-9 LV-11 XII
Lithuania LT-1 LT-4 Section 2. Fiscal Representatives LT-9 LT-10 LT-12 Luxembourg LU-1 LU-4 LU-7 LU-8 Section 4. VAT, ESL arfd Intrastat Reporting Obligations LU-10 Malta MT-1 MT-4 MT-6 MT-7 MT-9 The Netherlands., NL-1 NL-3 NL-7 NL-9 Section 4. VAT and Intrastat Reporting Obligations NL-11 Norway Poland Portugal Section 1. VAT Registration Section 4. VAT, ESL, ASPL and Intrastat Reporting Obligations Romania NO-1 NO-3 NO-6 NO-7 NO-9 PL-1 PL-4 PL-8 PL-9 PL-11 PT-1 PT-4 PT-7 PT-8 PT-10 RO-1 RO-4 RO-8 XIII
Section 4. VAT, ESL, Intrastat and Semi-ASPL Reporting Obligations RO-9 RO-11 Slovakia SK-1 SK-4 SK-8 Section 3. VAT Registration and. Deregistration SK-9 SK-11 Slovenia r. SI-1 SI-4 SI-7 SI-8 SI-10 Spain ES-1 ES-4, ES-7 ES-8 Section 4. VAT, ESPL, ASPL and Intrastat Reporting Obligations ES-10 Sweden SE-1 SE-4 SE-8 Section 3. VAT Registration SE-9 SE-11 Switzerland CH-1 CH-3 CH-6 CH-7 Section 4. VAT and Intrastat Reporting Obligations CH-10 United Kingdom UK-1 Section Y. The Obligation to VAT-Register UK-4 UK-9 UK-10 Section 4. VAT, ESL, RCSL and Intrastat Reporting Obligations UK-13 XIV