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What the Modernisation of Intrastat Means for Businesses

Andrew Decker
August 3, 2021

What is Intrastat?

Intrastat is a reporting regime relating to the intra-community trade of goods within the EU.

Under Regulation (EC) No. 638/2004, VAT taxpayers who are making intra-community sales and purchases of goods are required to complete Intrastat declarations when the reporting threshold is breached.

Intrastat declarations must be completed in both the country of dispatch (by the seller) and the country of arrival (by the purchaser). The format and data elements of Intrastat declarations vary from country to country, though some data elements are required in all Member States. Reporting thresholds also vary by Member State.

How is Intrastat being modernised?

In an effort to improve data collection and ease the administrative burden on businesses an ‘Intrastat Modernisation’ project was launched in 2017. As a result of this project Regulation (EU) 2019/2152 (the Regulation on European business statistics) was adopted.

  • The repeal of Regulation (EC) No 638/2004, effective from 1 January 2022.
  • The implementation of a new mandatory data exchange program between EU Member States relating to intra-community deliveries.
  • Making data exchange of data on intra-community arrivals in EU Member States optional.

The practical effects of these changes are two-fold:

  • Member States are required to collect additional data as part of the Intrastat Dispatch reports. This means that taxpayers making intra-community deliveries will need to record and report this additional information.
  • The regulation paves the way for Member States to potentially phase out Intrastat arrival reports, as the mandatory exchange of dispatch data makes separate arrivals reporting redundant. Reporting thresholds for arrivals tend to be lower than for dispatches and it’s expected that removing the need to report arrivals will eventually lead to less businesses having to participate in Intrastat reporting – unless the reporting threshold is reduced. Additionally, business who are involved in both intra-community dispatches and arrivals will halve their reporting obligation.
  • What information are Member States currently required to collect as part of Intrastat?

    Currently Member States are required to collect the following information as part of Intrastat:

    • VAT Number of reporting party
    • The reference period
    • The flow of goods (arrival, dispatch)
    • The 8-digit commodity code (Combined Nomenclature)
    • The Member State goods are dispatched to or from
    • The value of the goods
    • The quantity of the goods
    • The nature of the transaction

    What additional information will Member States need to collect from intra-community exporters by 1 January 1 2022?

    • The VAT number of the recipient of goods
    • The country of origin of the dispatched goods

    What additional information are Member States currently allowed to collect as part of Intrastat?

    • The identification of the goods, at a more detailed level than the Combined Nomenclature
    • The country of origin, on arrival
    • The region of origin, on dispatch, and the region of destination, on arrival
    • The delivery terms
    • The mode of transport
    • The statistical procedure

    What optional information can Member States provide mandatory exchange of intra-community exports?

    • The delivery terms
    • The mode of transport

    Exceptions to Intrastat requirements

    To ease compliance burdens on small businesses, EU Member States are allowed to set thresholds, under which businesses are relieved of their obligations to complete Intrastat. Thresholds are set annually by Member States, and threshold amounts for arrivals and dispatches are set separately.

    Under the current regulations, Member States cannot set thresholds at a level that results in less than 97% of dispatches from the Member State being reported and cannot set thresholds at a level that results in less than 93% of intra-community arrivals to the Member State being reported.

    Under current regulations Member States are allowed to let certain small businesses report simplified information, so long as the value of trade subject to simplified reporting does not exceed 6% of total trade.

    Under the upcoming new regulation, Member States need only ensure that 95% of dispatches are reported and the exchange of data on intra-community arrivals between Member States is optional.

    Take Action

    Need to ensure compliance with the latest Intrastat requirements? Get in touch with our tax experts.

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Author

Andrew Decker

Andrew Decker is a Senior Regulatroy Counsel at Sovos Compliance. Within Sovo’s Regulatory Analysis function, Andrew focuses on international VAT and GST issues and domestic sales tax issues. Andrew received a B.A. in Economics from Bates College and J.D. at Northeastern University School of Law. Andrew is a member of the Massachusetts Bar.
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