Update: 11 April 2023 by Gabriel Pezzato
The adoption of Pre-Filled VAT Returns so far
The trend of tax authorities pre-filling VAT returns using data gathered in continuous transaction controls (CTCs) is persisting across many countries.
CTCs see transactional data sent in real-time through e-invoices or e-reports auto-populate VAT returns and ledgers. Below is the status of the countries that either make available pre-filled returns or have projects to do so:
- Albania: Since July 2022, the Fiscalization system automatically fills in VAT returns and the books of sales and purchases based on invoices submitted to the central tax administration.
- Chile: For some time now the VAT return is pre-filled using data from the sales and purchases ledgers which receive their data through the SII system.
- Croatia: The Croatian tax authority has expressed the wish to make pre-filled returns available with information from the e-Racun platform, which is expected to become the e-invoicing platform.
- France: Since 2022, VAT returns have been pre-populated with information on imports based on electronic customs declarations. France is expected to use data from the e-invoicing regime rolled out in 2024.
- Greece: Greece has made pre-filled VAT returns available since December 2022 based on data transmitted by taxpayers to the myDATA platform.
- Indonesia: The introduction of e-faktur v3.0 in October 2020 enabled the auto-population of VAT returns for taxpayers in the scope of the local e-invoicing mandate.
- Italy: Since 2021, the Italian tax authority has made pre-populated periodic returns available. The authority made pre-populated annual returns available to taxpayers using data transmitted to the SDI platform in 2023.
- Peru: Peru pre-fills Book of Sales, Income and Expenses using data provided by taxpayers through transactional reporting to SUNAT.
- Portugal: Portugal pre-populates VAT returns for certain taxpayers using data transmitted to the tax authority’s platform since July 2020. The country is expected to pre-complete the annual IES declaration based on information provided in the accounting SAF-T file, which will be a mandatory periodic obligation from the fiscal year 2024.
- Spain: Spain introduced pre-filled Modelo 303 using data gathered from the SII platform in 2021.
Disproving returns created by the tax authorities using transactional data sent by the taxpayer is a challenging task. Tax authorities assume they either have all the data they need for an assessment or the taxpayer has failed to submit it in good time.
Therefore, it is imperative to maintain complete electronic records that pre-filled VAT returns can reconcile. Possessing analytics solutions that can perform such analysis in an automated way might also help taxpayers to identify mismatches and correct errors.
For more information on the rollout of pre-filled VAT returns, contact our team of experts.
Update: 9 March 2022 by Charles Riordan
Pre-Filled VAT Returns – New Developments in 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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