The convergence of traditional Value Added Tax (VAT) and transactional compliance regimes is creating new obligations and responsibilities for companies doing business around the world. When it comes to VAT, compliance is so much more than just reporting.
Here are six pitfalls you should avoid in the pursuit of VAT compliance:
Companies with multijurisdictional supply chains must ensure their VAT determination decisions are accurate every time. Managing the validation process with VAT Determination software that checks validity before invoices are cut can save time and improve data accuracy from the outset.
It’s also best practice to complete your buyer VAT ID checks at this point in the process to avoid nasty surprises later. Checking manually can be incredibly resource-intensive so using a solution that can automate this for you can save both time and hassle.
To be considered legal for VAT purposes, invoices need to meet a specific set of requirements which vary by jurisdiction. Without legally valid invoices, you may be presented with a host of problems when the time comes to reclaim input VAT. If you have accepted an invoice that doesn’t tick the boxes that make it legal for VAT purposes, you invite the scrutiny of the tax authorities.
Aside from possible fines, the delay while anomalies are reviewed can impact your cash flow and cause reputational damage. Even in a paper world, VAT deduction is not permitted for improperly formatted invoices.
With VAT obligations always growing and adapting, the pressure on internal tax teams is greater than ever. Each government has its own approach to penalties for late submissions or overdue payments. Manual processes can no longer be relied upon to meet the demands of the authorities on time, and with accuracy.
It’s possible to streamline the reporting process using software, outsourced services or a hybrid approach; what’s best for your business depends on how your tax team is organised.
With new requirements coming thick and fast, teams are working harder and faster. As a result, opportunities for manual error are at an all-time high.
Manually processing VAT invoices can be incredibly time-consuming and leaves room for oversight and human error. Even individual errors can lead to bigger problems down the line, attracting the attention of the authorities and impacting your ability to do business.
Extracting the right data from the appropriate system modules, and then processing and mapping it so that it can be summarised, is a complicated and detailed task. To complicate matters further, each jurisdiction has its own unique reporting requirements you must meet. Automating these processes can improve accuracy and your ability to comply.
Preparing VAT Returns, EC (European Commission) Sales Lists, Intrastat Declarations and other country-specific reports for regular submission can be demanding. Add in the need to prepare a SAF-T (Standard Audit File for Tax) report and the complexity intensifies. SAF-T requirements differ by country, including transactional data (about sales and purchases) and accounting data at a minimum, but often need information about assets and inventory as well.
Combining detailed data from different source systems with an exacting submission format means the report cannot be easily eyeballed to check for possible errors. Tax Authorities use software to analyse the SAF-T filings they receive and decide where to follow up with further auditing. To safeguard the quality of the submission and avoid a call from the tax authority, it’s essential that data is thoroughly analysed before it’s submitted – ideally using tools of the same calibre that each Tax Authority is using.
It’s never been more important to seek the right advice for VAT. Admitting you need help can be a daunting but crucial step, but the fear of non-compliance should be a bigger concern.
Simply put, there comes a time for every multinational organisation when managing complex tax obligations in-house just isn’t viable anymore. Consolidating your compliance with Sovos gives you access to industry-leading software, consulting services and regulatory experts, all of which are focused on ensuring you’re compliant now and will remain so in the future.
To find out more, get in touch today.
Staying informed about VAT Reporting and SAF-T can be challenging when it requires keeping up with ever-changing and demanding regulations.
Ensuring you are well-informed about the latest updates from tax authorities is a crucial step in preparing for potential consequences.
In Sovos’ most recent quarterly update webinar on VAT Reporting and SAF-T, Regulatory Counsel Inês Carvalho explores the most recent legislative amendments and their potential impacts on your business.
During this webinar, our expert will cover:
EU-based companies must grapple with VAT charges on a myriad of goods transactions within the EU. As a manufacturing company, this intricate web of varying VAT rates can pose significant challenges. Choosing the right EU entry point is a pivotal decision, complicated by each country’s unique VAT regulations. Compounding the complexity, you may not always know the precise location of your goods in transit.
Manufacturers face supply chain disruptions, potentially jeopardising their already sophisticated operations. The question is, where should you commence your VAT journey?
Our VAT expert Russell Hughes guides you in this immersive webinar, where you will gain insights into:
Join us on this transformative journey through the VAT labyrinth and gain a competitive edge in the EU market. Don’t miss this opportunity to optimise your expansion strategy.
Join our insightful Insurance Premium Tax webinar where Sovos’ IPT experts James Brown and Khaled Cherif delve into the lesser-known, insurer-borne taxes in Belgium, France and Ireland. These taxes, whilst not directly charged to policyholders, can significantly impact insurers’ bottom lines.
Explore the intricate landscape of the following areas, considering the impact that they can have on insurers’ financials:
Discover the background to these taxes and how you can ensure compliance with their requirements to mitigate business risk and maximise profitability. Don’t miss this opportunity to shed light on the hidden financial burdens that can significantly affect your insurance business.
When it was announced recently that the introduction of a new French e-invoicing mandate had been delayed until September 2026 there was a collective sigh of relief amongst many in the tax and finance world. More time to adequately prepare, put systems and methodologies in place and have your business ready to be compliant from the get-go.
Sounds optimal, but let’s focus on reality. First, the reported delay is a bit deceiving. While it may not officially take effect until 2026, you only have a matter of months to get prepared to participate in the extended trial. Human nature may be to push it to the side and focus on more short-term deadlines. However, to not take advantage of the extra time provided would be shortsighted at best.
Here are five ways you can make this extra time work for you:
Note: portions of this section originally appeared in the Sovos blog, France: B2B E-Invoicing Mandate Postponed, updated 19 September 23.
Businesses will soon be able to register proactively for the pilot program, which has been designed to allow businesses to test the PDP platform. This program is intended to build knowledge and confidence and ensure businesses are on the path to readiness.
Therefore, it would be prudent to regard the delay as a mere six-month postponement, with the beginning of the pilot program acting as the de facto starting date. To understand the full impact on their business processes and data flows, companies will need to thoroughly test up to 36 use-cases.
The good news is that the many software vendors helping companies to streamline their purchase-to-pay and order-to-cash processes will be eager to test the compliance of their solutions as early as possible in what has become a completely new ecosystem.
We are proud to say that Sovos is one of the first 20 candidates for service provider (PDP) accreditation in France and as such, will be fully prepared to assist your organization through the trial process and beyond.
Looking for more information about how to comply with the French Mandate?
Download our French Mandate eBook or Contact our expert team.
Greece’s VAT reform started back in 2020 and it has manifested itself in three continuous transaction control (CTC) initiatives.
Namely, the initiatives are:
Recently, the introduction of an e-transport mandate was included in the country’s VAT reform strategy, although not much detail has been published yet.
More progress has been made in implementing the myDATA scheme and the new cash registers than for CTC e-invoicing. However, in the last few months, the authorities have taken steps towards setting up the right framework to make CTC e-invoicing – which is currently voluntary for B2B transactions – mandatory for all.
myDATA went live as a voluntary system in 2020 and followed a gradual implementation timeline which is ongoing. It is an e-audit system that requires taxpayers to report transactional and accounting data to the tax administration, in real-time or periodically, which populates a set of online ledgers maintained on the government portal. The goal of myDATA is for the online ledgers to be the only source of truth of the taxpayer’s tax and financial results, and for their respective information to pre-fill the taxpayer’s VAT returns and financial statements.
Greece’s myDATA is a reporting obligation of ledger-type data and it is not to be confused with e-invoicing as it doesn’t require invoices to be issued and exchanged in electronic form. Greece allows for invoices (in B2B transactions) to be issued and exchanged on paper or electronically following the standard e-invoicing rules of the EU VAT Directive.
In parallel with the roll-out of myDATA, the authorities established an accreditation framework for e-invoicing service providers and introduced a voluntary e-invoicing scheme involving accredited entities. These entities are accredited by the government to perform certain functions, namely:
To encourage the uptake of CTC e-invoicing, the government provided several incentives to businesses to use e-invoicing facilitated through accredited service providers. It also obliged businesses who opt for CTC e-invoicing to use no other methods to fulfil the myDATA requirements e.g., ERP reporting, except through accredited service providers. This implies that a business selecting CTC e-invoicing for its B2B transactions must use the same method for issuing and reporting all other invoices, including B2G transactions, and vice versa.
CTC e-invoicing became mandatory for B2G transactions on 12 September 2023 for VAT-registered suppliers to certain government agencies. The mandate will continue to roll out in phases with the next main milestone coming up in January 2024. This obligation covers the vast majority of public contracts, from defence and security to general supplies and services, with some exceptions (e.g. contracts in defence and security which are classified as secret).
With the introduction of the B2G e-invoicing mandate, the use of CTC e-invoicing has indirectly become mandatory for B2B transactions too, encompassing both issuance and reporting to myDATA. It means that businesses in the scope of the B2G e-invoicing mandate have the obligation to use CTC e-invoicing through accredited e-invoicing service providers to issue and report both their B2B and B2G e-invoice flows to myDATA.
While a B2B e-invoicing mandate cannot be introduced without prior approval by the European Commission, the Greek Ministry of Finance announced that it has started a dialogue with the Commission to discuss the conditions required to implement a nationwide mandate.
Although an ambitious timeline, the Ministry envisions a full implementation of a B2B e-invoicing mandate within 2024.
Clearly, Greece’s CTC initiatives are in line with the EU paradigm shift towards increased governmental control over transactional and accounting data – it recognises the benefits of tighter tax compliance and taking steps to close its tax gap.
Significant progress has been made, with myDATA operational since 2021. With the addition of CTC e-invoicing and the e-transport mandate in the VAT reform strategy, the Greek government and businesses face a demanding period in the coming years.
Need help with the current VAT reform in Greece? Our expert team can help.
E-documents or electronic documents are rapidly growing in usage across businesses of all shapes and sizes, in countries around the world.
While the automated exchange of e-documents is a relatively new phenomenon which is being adopted on a country-by-country basis, there is basic universal information that your business would benefit from understanding – and potentially utilizing.
This blog will serve as your one-stop shop for required e-document knowledge.
An e-document is an electronic transactional document or message and is typically used in an automated business process.
As the digitisation of business accelerates, so too does the use of electronic documents – whether that be an electronic invoice sent in real-time to a national tax authority or an electronic goods receipt note exchanged between companies.
The difference between electronic documents and other digital documents such as PDFs is that e-documents are machine-readable and are generally exchanged by online platforms or software.
That said, there are numerous types of e-documents and there is little standardisation as each country has its own stance and potential mandate on their adoption. The European Union has long been working on its approach to e-documents for increased interoperability with definitions and rules as part of its efforts under the eGovernment Action plan and eIDAS regulation to facilitate digital transactions and services in the EU.
In addition, the UK recently adopted the UK’s Electronic Document Trade Act which is a huge step towards the digitization of trade documents and potentially paperless global trade.
There is a wide variety of electronic documents to suit a number of applications across business, helping to streamline workflows and operations, facilitate cross-border trade and save on costs.
E-document mandates in Turkey, for example, include:
Other electronic documents that are used in some countries include:
There has been a notable implementation of e-documents in transport in recent years, with the likes of Romania adopting a system that requires taxpayers to use an electronic waybill system to obtain clearance of the transport document before the transport of goods begins. Read our dedicated blog to find out more about the global rise of e-transport documents.
One particular e-document that has had an exponential rise in utility over the past few years is the e-invoice. Electronic invoices have grown in popularity as countries develop their continuous transaction controls (CTC) and e-invoicing regulatory obligations. The likes of France, Spain and Poland all plan to introduce e-invoice mandates, requiring taxpayers to send invoices electronically.
Read our comprehensive e-invoicing guide for more information.
There is a host of reasons that electronic documents can be beneficial, which explains why tax administrations globally are implementing e-document mandates.
A primary reason for the use of e-documents is that they generally allow for the automation of workflows, increasing safety, accuracy, transparency and cost-saving for the involved parties. Automating the process of generating and exchanging documentation reduces the risk of error, allows for seamless transmission of information (including to tax authorities who seek greater transparency) and reduces the reliance on paper (providing an environmental benefit).
Another reason businesses use electronic documents is simply because they are mandated to do so as part of tax digitization controls. An increasing amount of tax authorities are making it an obligation to send documents electronically, and facing a penalty due to non-compliance is not desirable. As CTC regime adoption grows, so too does the need for businesses to meet their new e-document obligations.
The compliance conditions of e-documents vary depending on the national rules, but there are some typical conditions across regimes.
In the context of tax digitization controls, the conditions that apply to some of the most regulated e-document types, such as the e-invoice, include:
The difference between electronic documents and digital documents is a hot topic. It’s easy to get confused between the two considering that “digital” and “electronic” are used interchangeably by many, but it’s important to understand the difference.
Digital documents are often a digital analogue of a physical document – think a scanned document, photograph, or PDF – and oftentimes are simple for people to read and digest. An example of a digital document would be an invoice sent as a PDF via email.
Electronic documents are files of data that are generated by and for computers, making them hard for people to read due to their formatting. Such data – like that seen in a structured e-invoice (e.g. XML) – is meant to be sent from one system to another without interference from humans.
Sovos’ software allows businesses to manage CTC obligations, including e-invoicing compliance and archiving.
As the world continues its digitisation, it’s important to stay on top of evolving regulations and to keep up with best practices for your business. Working with Sovos, your business can:
Find out more about Sovos’ CTC solutions.
How can manufacturers navigate the ever-evolving and increasingly complex world of value added tax (VAT)? There are several, key ways to evaluate your current and future approach to VAT, maintaining compliance the entire way.
Far too often we have seen IT-centric processes miss (or at least misunderstand) key compliance needs and requirements, and tax-centric processes fail to consider the practicalities of automation. Both tax and IT must realise that they will need each other for ongoing maintenance and solution expansion initiatives.
Organisations would be well served to establish and share solid documentation around their compliance protocols and conduct periodic reviews to ensure they are continuing to do what is necessary to minimise audit risk and keep their company safe.
There are both tactical and strategic questions at play here, and manufacturers must make thoughtful business decisions around how to handle the level of VAT compliance requirements that their operations demand. Increased audit volume is coming, so the industry has to commit to effectively and efficiently meeting the ever-growing compliance obligations of e-invoicing and periodic reporting.
Although you may have an indirect tax strategy in place, make sure to evaluate how effective your current strategy is, especially as requirements are undergoing significant changes in so many jurisdictions. Is your strategy sufficiently up-to-date to ensure it efficiently and accurately addresses current and upcoming compliance obligations and is scalable to seamlessly meet the rapidly evolving needs business will face tomorrow.
Digital identity verification and transaction management frees your organisation from regulatory friction and our intelligent solutions integrate with your processes to ensure valid and future-proof transactions.
Sovos helps you remain focused on your central business by reducing the friction of complex tax digitisation mandates. We take a future-facing approach to indirect tax compliance with intelligent tools that provide insights for a competitive advantage.
Learn about compliance solutions built for manufacturers!
When considering motor insurance, it’s worth remembering that everything is high – from tax rates to the amount of administration required.
This blog includes general information about the taxation of motor insurance policies in Europe, covering the types of applicable taxes, how they are calculated, vehicle exemptions and more. We also have blogs for some of the more complex taxation requirements in the region, written by our regulatory experts.
Update: 2 November 2023 by Edit Buliczka
The Amendment to the Sixth Motor Insurance Directive, also known as the “MID,” was published in the Official Journal of the European Union on 2 December 2021. MID relates to insurance against civil liability in relation to the use of motor vehicles and the enforcement of the obligation to insure against such liability.
The measures of the Directive 2021/2118 (the “Amendment”), which was signed on 24 November 2021, must be transposed into national law by 23 December 2023, at the latest.
Among other important measures, this Amendment is relevant to insurance premium taxation. Two new articles were added to the MID regarding the contributions that may be payable by the insurance companies to the national guarantee funds.
According to Article 10a and Article 25a, every EU Member State is required to ensure that there are sufficient resources available to compensate injured parties in a motor vehicle accident where the relevant insurer is subject to bankruptcy or winding-up proceedings. The insurers may be required to contribute financially to these funds, but only insurance companies authorised by the Member State that imposed the payments may be subject to these levies.
In practice, the measures mean that contributions to the national guarantee funds related to compulsory third-party motor liability insurance policies cannot be collected from foreign insurers that write businesses on a freedom of services (FoS) basis. Since there is a requirement for the implementation of these measurements coming into national law by 23 December 2023, legally no guarantee fund contributions are payable by foreign insurers as of 24 December 2023.
Some governments, including Denmark and Ireland, have already started to draft the necessary regulations and incorporate them into their national laws. Others will likely follow shortly as there are under two months available for the implementation of these rules, at the time of the publication of this update. Perhaps several annual budgets will include the necessary legislative changes to comply with the measurements of the Amendment.
If you would like to receive further information about the guarantee fund contributions, please contact our IPT experts.
According to Annex 1 of the Directive 2009/138/EC of the European Parliament and of the Council of the EU, often known as the Solvency II Directive, motor vehicle insurance policies are classified as Class 3 Land vehicles (other than railway rolling stocks).
This business category covers any damage or loss to:
Class 10 Motor Vehicle Liability is another business class that covers motor-related risks. This business class covers all risks associated with liabilities deriving from the operation of motor vehicles on land.
A third-party motor vehicle insurance coverage guarantees that if an accident happens and/or damage occurs to another person’s vehicle, the expenses of the accident or damage are covered by the insurer of the person who caused the accident or damage.
We must not forget Directive 2009/103/EC on civil liability insurance for motor vehicles which governs mandatory motor insurance policies throughout Europe. One of the directive’s main principles is that all motor vehicles in the EU must have third-party liability insurance.
We should also mention that the European Parliament and the Council adopted the Directive (EU) 2021/2118 on 24 November 2021, aiming to modernise and amend the aforementioned directive with a deadline for the transposition of 31 December 2023.
In this blog, we outline the main characteristics of the taxation of motor-related insurance policies.
Premiums derived from motor-related policies are often subject to several types of insurance premium taxes. Class 3 risks are primarily subject to insurance premium tax (IPT), whereas mandatory third-party liability (MTPL) policies are subject to a wide range of taxes.
This may include IPT and/or payments to guarantee funds, as well as additional levies, charges, or contributions such as:
There is also the traffic safety fee, Automobile Rente (CAR) payment, automobile insurance bureau levy and rescue tax. This list goes on.
The disclosure and payment rules are also diverse. These fees can be paid yearly, monthly, quarterly or in instalments – with or without prepayments or final adjustments.
If IPT is charged on the motor hull or the MTPL policies, it is typically based on the premium amounts received, with the tax being a percentage of the premium. This is not the case in Austria, for example, where the computation of MTPL taxes is complicated.
The tax is calculated based on the engine’s horsepower and CO2 emissions. It also varies depending on the registration date of the vehicle, the frequency of payment and whether the 2017/1151 EU law applies to the vehicle. On top of that, no payment is due if the size of the engine does not reach 24kW or 65 kW. Contrary to the Austrian example, the IPT rate in Hungary is 23% – based on the premium amount.
Contributions to the Guarantee Fund are typically calculated as a percentage of the premium, as in France, Greece or Sweden. However, this fee can also be fixed as it is in Denmark, for example.
Most countries exempt premium amounts from policies covering motor hull or MTPL risks based on the following:
If the vehicle is operated by the authorities – such as police vehicles, fire trucks, or ambulances – or the armed services, it is typically exempt. Cars driven by disabled individuals and buses used for public transportation are likewise excluded in most cases. Insurance policies covering electric or hybrid vehicles may be excluded as well.
Sovos can provide advice on motor-related insurance premium taxation. Our compliance team may be able to help you in settling IPT in various countries across Europe, contact us today.
With the rate of change in tax digitization not set to slow down any time soon, it’s more important than ever to keep up with what’s happening where you do business.
This quarter, our VAT Snapshot webinar looks in detail at CTC and e-invoicing implementation timelines across six different countries.
Join Dilara İnal and Carolina Silva from our Regulatory Analysis and Design team for an examination of scope, key timelines and essential milestones for compliance across these jurisdictions.
The webinar will cover:
As always, please bring your questions for our experts in the Q&A at the end.
Stay up to date with the evolving landscape of tax mandates by registering today.
Updated: 9 April 2024
Intrastat thresholds are value thresholds which decide if companies in an EU Member State qualify to file a return to tax authorities, based on their intra-community trading. These thresholds change annually, prompting businesses to conduct an annual recalculation to know their obligations.
This blog contains all the Intrastat reporting thresholds for 2024, as well as important information for businesses trading within the EU. It will be updated to reflect any changes as soon as they are implemented.
Level up your Intrastat knowledge with our handy Intrastat guide, which covers reporting requirements, returns and declarations, commodity codes, how Sovos can help and more.
Intrastat thresholds are annual value thresholds that decide whether businesses must declare their intra-EU trades to the relevant national tax authorities.
While Intrastat is based on a European Union regulation, Member States have implemented the rule differently. As such, companies trading across the EU must be aware of the exemption threshold for each country they trade in – whether that’s acquiring or dispatching goods.
When a business exceeds the threshold in a Member State, it must continue to file Intrastat returns with the country until the applicable January-to-December period has concluded.
Intrastat thresholds must be calculated each year as they change annually, and there are separate values for arrivals and dispatches.
To make it easy for your business, we have listed all the Intrastat thresholds below in a table – country-by-country. Find out whether your company needs to file an Intrastat return in EU Member States where you do business.
The current Intrastat thresholds have been in place since the beginning of the year. They are due to change again in 2025. For the current applicable thresholds for your business, view the table below.
The table will be kept updated with the latest threshold values.
Country | Arrivals | Dispatches |
Austria | EUR 1.1 million | EUR 1.1 million |
Belgium | EUR 1.5 million | EUR 1 million |
Bulgaria | BGN 1.65 million | BGN 1.9 million |
Croatia | EUR 400.000 | EUR 300.000 |
Cyprus | EUR 320.000 | EUR 75.000 |
Czech Republic | CZK 15 million | CZK 15 million |
Denmark | DKK 41 million | DKK 11.3 million |
Estonia | EUR 700.000 | EUR 350.000 |
Finland | EUR 800.000 | EUR 800.000 |
France | No threshold | No threshold |
Germany | EUR 800.000 | EUR 500.000 |
Greece | EUR 150.000 | EUR 90.000 |
Hungary | HUF 270 million | HUF 150 million |
Ireland | EUR 500.000 | EUR 635.000 |
Italy | EUR 350.000 (goods) EUR 100.000 (services) |
No threshold |
Latvia | EUR 350.000 | EUR 200.000 |
Lithuania | EUR 550.000 | EUR 400.000 |
Luxembourg | EUR 250.000 | EUR 200.000 |
Malta | EUR 700 | EUR 700 |
Netherlands | The Netherlands have abolished the Intrastat threshold. Intrastat has become a report to submit “on demand” of the Dutch authorities. | The Netherlands have abolished the Intrastat threshold. Intrastat has become a report to submit “on demand” of the Dutch authorities. |
Poland | PLN 6.2 million | PLN 2.8 million |
Portugal | EUR 600.000 | EUR 600.000 |
Romania | RON 1 million | RON 1 million |
Slovakia | EUR 1 million | EUR 1 million |
Slovenia | EUR 220.000 | EUR 270.000 |
Spain | EUR 400.000 | EUR 400.000 |
Sweden | SEK 15 million | SEK 4.5 million |
United Kingdom | GBP 500.000 | GBP 250.000 |
Businesses that trade within an EU Member State but at figures lower than those listed in the above table are not required to file Intrastat returns. There are additional nuances that exist on a country-by-country basis that may change the obligations of a company.
The Netherlands removed its threshold in 2023. Its tax authorities will notify taxpayers subject to submitting Intrastat returns. They monitor intra-community transactions performed by domestic taxpayers monthly.
Italy and France differ from other countries as it has combined Intrastat returns and ECSL returns into a single declaration.
It can be difficult to stay on top of Intrastat, especially with the variety among countries, but Sovos can help. Contact our team of experts to find out how we can assist.
If you are interested in learning more about European VAT compliance, download our free eBook.
Sovos’ Advanced Periodic Reporting (APR) is a cloud solution. It mitigates the risks and costs of compliance, futureproofing and streamlining the handling of your periodic reporting – including Intrastat.
Our solution automates, centralises and standardises the preparation, reconciliation, amendment and validation of summary reports to make meeting your obligations simple.
Intrastat is an obligation created in 1993 that applies to certain businesses that trade internationally in the European Union. Specifically, it relates to the movement of goods – arrivals and dispatches – across EU Member States.
The requirements of Intrastat remain similar across the EU, though certain Member States have implemented rules differently. As a result, it can be confusing when trading cross-border in the region.
From reports and returns to thresholds and specific codes, knowing what applies to your business and how to comply is important. Consider this your go-to guide to understand Intrastat rules, requirements, reporting and terminology.
Intrastat reporting largely involves statistics but does occasionally require fiscal data. The information needed depends on the threshold of the EU Member State that your business is established within.
The mandatory data in Intrastat reports were originally regulated by Article 9 of Regulation (EC) No 638/2004, which is no longer in force, though it also lists optional elements for reporting consistency across the EU. Typical data requirements included:
In 2022, a project for the modernisation of Intrastat was introduced, Regulation (EC) No 638/2004 was abolished, and a new Regulation 2019/2152 entered into force. In addition to the data mentioned above, it made the following information mandatory in all Member States:
Optionally, Member States can also opt to ask for:
An Intrastat return, also known as an Intrastat declaration, replaced customs declarations in 1993 to serve as the source of trade statistics within the European Union.
These returns provide the European Commission, as well as EU National Customs Authorities, with detailed insights into the goods being traded in the European Union. Due to the information required in the declarations, authorities can identify the kinds of goods that are circulating, as well as the volume of such goods.
If a company does not submit Intrastat returns when qualifying to do so it might be liable to hefty fines.
It’s important to understand how Intrastat works with other compliance obligations in general, such as submitting VAT returns, recapitulative statements (EC Sales Lists) and, notably for e-commerce sellers in the EU, schemes like Union OSS.
Intrastat returns are required when your business dispatches goods to or acquires goods from another EU Member State when the value exceeds the country’s threshold. Each Member State sets the deadline for the submission of declarations to its respective national tax authority.
In Germany, for example, applicable businesses must report every month, with each declaration required within 10 days after the end of the reporting period ending. This can be done online or through the Germany statistics authority portal.
Your business should check the value of goods traded within EU Member States for the past year to see whether they exceed national thresholds.
Qualifying thresholds dictate whether a business must register for Intrastat or not. These thresholds must be calculated each year, with each EU Member State having its own figure that changes annually.
When a threshold is exceeded in a country, businesses should continue to file Intrastat returns until the applicable January-December period is complete.
Read our blog for a comprehensive Intrastat threshold table containing each country’s qualifying figure.
Otherwise known as commodity codes or Combined Nomenclature (CN), Intrastat numbers are part of a system allowing authorities to identify the types of goods traded across the European Union. The requirements for Intrastat numbers are largely the same across EU Member States, with just a few exceptions.
These numbers, or codes, are part of an eight-digit system that is comprised of Harmonized System (HS) codes and EU subdivisions. They contain complete nomenclature for the description of goods and are subject to annual revisions, ensuring they are up to date with technology and trading patterns.
The European Commission published the Intrastat numbers for 2023 in October 2022.
Sovos’ SAP Framework for periodic reports including Intrastat takes care of the extraction of data required to generate periodic reporting for businesses. Sovos’ solution generates compliant Intrastat reports by extracting data from required SAP modules. Using SAP with this add-on provides a framework for periodic returns including Intrastat, EC Sales Lists and SAF-T.
In turn, this increases the ease of compliance and reduces the risk of penalties from incorrect filings – producing cost and time savings for your business.
Speak to our team about how we can help with Intrastat compliance.
Intrastat returns are still required by businesses registered for VAT in the UK, even after Brexit, with respect to supplies of goods from the EU into Northern Ireland and vice-versa.
Businesses in the EU that trade goods with other EU countries – whether they’re dispatched or received – need to file Intrastat returns if the annual trade value exceeds the applicable country’s threshold.
Intrastat is a system which allows the European Union to track traded goods between its Member States. It was devised to replace customs reporting on the movement of goods within the EU, which stopped in 1993.
Intrastat divides goods into categories that are identified by eight-digit codes. These categories are typically referred to as Intrastat codes, commodity codes or Combined Nomenclature (CN).
Want to learn about EU VAT compliance? Our Introduction to EU VAT is a great place to start. We also have specific guides to help you understand important EU tax requirements, including the EU VAT e-commerce package and VAT between European countries.
The speed at which regulations and requirements evolve can make it difficult to stay abreast of VAT Reporting and SAF-T.
Remaining knowledgeable about recent changes enforced by tax authorities is the initial stride towards readiness for repercussions.
In Sovos’ most recent quarterly update webinar on VAT Reporting and SAF-T, Inês Carvalho, Regulatory Counsel, delves into the freshest legislative revisions concerning VAT reporting and SAF-T and the potential implications for your business.
In this webinar, our expert will cover updates on: