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Pre-Filled VAT Returns – New Developments in 2022

Charles Riordan
March 9, 2022

We have previously written about the growing trend of tax authorities “pre-filling” VAT Returns using data from electronic invoices – a trend that began in Latin America and has since spread to several European countries. These pre-filled returns, when accurate, can serve as a simplification measure for taxpayers, who can fulfill their reporting obligations simply by approving what has been generated for them. At the end of 2021, two European countries, Italy and Spain, introduced pre-filled VAT Returns, with Hungary and Portugal planning to introduce them in some capacity.

Pre-filled VAT returns across Europe

The landscape for pre-filled VAT Returns has changed significantly in 2022. Hungary and Portugal have both postponed their plans to introduce them. The Hungarian tax authority (NAV) has reversed its decision to introduce pre-filled returns after delaying the eVAT project for several months due to the ongoing COVID pandemic. NAV will instead focus on enhancements to its real time invoice reporting model (RTIR). Because any efforts to pre-fill VAT Returns are dependent on the state of RTIR, it would not be surprising to see NAV revive the eVAT project down the line.

Portugal, meanwhile, had planned to potentially pre-fill sections of its annual VAT Return with data from the so-called “Accounting SAF-T,” which was due to become a mandatory filing in 2022. However, following a rejection of the state budget, the Portuguese tax administration is now stating that Accounting SAF-T will become a mandatory filing from 2024.

On the other side of the ledger, 2022 has seen France introduce pre-populated data into its VAT Returns, while Greece is considering using its myDATA system to pre-fill VAT Returns for taxpayer approval.

France is a particularly interesting case, as it has no e-invoicing regime to pull data from. Instead, auto-population of data on the French VAT Return is limited to information on imports, based on electronic customs declarations. France plans to introduce mandatory B2B e-invoicing in 2024, which may end up widening the scope of pre-population. This new approach was spurred on by a transfer of responsibility from French Customs authorities to French tax authorities for collecting VAT due on imports. Notably, only the VAT due to the authorities, as settled in the VAT Return, is pre-filled; corresponding input VAT amounts must be populated by the taxpayer (likely because some taxpayers won’t be able to claim full deductions).

Greek plans to introduce pre-filled VAT Returns are more undetermined, but some reports claim that a pilot program will be introduced at some point during 2022.

The future of pre-filled VAT returns

It is clear that, despite delays in Hungary and Portugal, European tax authorities are demonstrating a continuing interest in utilising pre-filled VAT returns. In fact, from a tax authority perspective, pre-filled VAT returns are the natural evolution from a mandatory e-invoicing system or a real-time invoice data reporting system – the data is already at their disposal. From the taxpayer standpoint, it is therefore imperative to maintain accurate and complete electronic records that can be reconciled with pre-filled VAT Returns. This will help taxpayers to correct any errors or raise any necessary challenges to VAT assessments. A high-quality accounting software program can be a useful tool to achieve this end.

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Author

Charles Riordan

Charles Riordan is a member of the Regulatory Analysis team at Sovos specializing in international taxation, with a focus on Value Added Tax systems in the European Union. Charles received his J.D. from Boston College Law School in 2013 and is an active member of the Massachusetts Bar.
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