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Obtaining a foreign VAT number is only the first step in a long series of other obligations. Once the VAT number is active, your business will have to comply with the following legal requirements:
- Keep VAT accounting records
- File a periodic VAT return
- Submit an annual recapitulative return
- Pay local VAT
- Submit a statement of your intra-EU transactions
- Filling in an Intrastat declaration
- Is the filing of declarations and statements done in paper or electronic format?
- When should the data be sent to the tax authorities?
All these practical questions relate to the VAT obligations and formalities that your company must comply with. The general rules on this subject are set out in Articles 193 to 280 of the VAT Directive, while the practical details (model of return, frequency of submission, format, etc.) are unfortunately left to the discretion of each Member State.
Keeping VAT accounting records
Your company must keep a sufficiently detailed bookkeeping to enable VAT application and verification by the local tax authorities. Some countries (e.g. Belgium, Germany) require to provide fairly basic data, while for other countries (e.g. Romania, Poland) it is a veritable "catalogue à la Prévert".
Filing a periodic VAT return
Transmitting an annual summary declaration
Paying local VAT
Every taxable person who is liable for VAT must pay the net amount of VAT when submitting the VAT return. However, Member States may set a different deadline for the payment of this amount or collect instalments (e.g. Italy). Your company must therefore ensure that it pays the VAT due to the local Treasury in the form and by the deadline set by the country. This legal deadline may be quite short (e.g. Germany) or long (e.g. Netherlands, Denmark).
Submitting a statement of your intra-EU transactions
Are declarations and statements filed in paper or electronic format?
In the age of digitalisation of tax administrations, there are still a few countries (e.g. Sweden) that still require foreign companies to file their VAT returns and other statements on paper. But most European countries now require electronic filing of these data. This raises the laborious issue of access to the local tax administration portal. This is only easily accessible for local companies ! For foreign companies, access to this portal is a real crossroads.
When should the data be sent to the tax authorities ?
The frequency depends on the country in which your company is registered. The VAT Directive, for example, states that returns should be submitted at least once a year. In practice, many EU countries require a monthly or quarterly return. In general, companies with a high turnover (e.g. Belgium, Denmark) have to file returns more frequently.
Beware of penalties !
The VAT calendar abroad is certainly different from the one you know in your country. So forget all your usual reflexes or beware of penalties. All errors, oversights or omissions are paid for in cash in regards to VAT. And when it comes to financial penalties, the tax authorities can be very heavy-handed: fines for failing to file VAT returns or for being late, for incorrect or incomplete intra-EU statements, for incorrect Intrastat returns, for exceeding the legal deadline for paying VAT, etc.
Perhaps you secretly think that you can escape sanctions by claiming good faith? It’s unrealistic. You might as well know that before you start!
Our solution tailored to your company
Our firm can help your company manage its VAT obligations in any of the other 27 countries of the European Union. The services we offer are not limited to the purely administrative aspect of VAT (such as filing a VAT return in another country), but are designed to help you develop your business abroad and ensure that VAT does not become a barrier to your economic expansion.
How does this work in practice?
It's very simple for you: together with your accountant, we determine the data that needs to be compiled and transmitted to us for the country in question. And based on this information, we take care of everything else:
- Keeping the accounting records
- Preparation and sending of VAT returns and other statements
- Coordination of VAT payments to local treasuries
- Follow-up of VAT credit refunds
- Assistance with tax audits
In short, we provide your company with fiscal peace of mind when doing business abroad. This is our added value!
Contact us
Any VAT question ?
We offer you the opportunity to discuss the subject during a free videoconference.