VAT Compliance in Romania: An Overview for Businesses
Romanian VAT Compliance can be described as a layered system conflated with different declarations and requirements, from SAF-T obligations to electronic invoicing. In this page, businesses aiming to remain compliant and looking to know the most up to date news, can find an overview of the main Romanian VAT rules. Scroll down to learn about Romanian VAT compliance requirements and how to remain compliant.
Romania is a complex country for VAT rules, with many elements that companies need to be aware of. These include:
Periodic VAT return (Decont de taxa pe valoarea adaugata)
Monthly 25th day of the month following the end of the tax period
Quarterly 25th day of the month following the end of the tax period
Romanian Domestic Supplies & Purchase listing (Declaraţie informativă privind livrările/prestările şi achiziţiile efectuate pe teritoriul national – D394)
Monthly 30th day of the month following the end of the tax period
SAF-T (Declarației informative D406)
Monthly/Quarterly
SAF-T Stocks (Declarației informative D406)
On-demand – a minimum 30-day deadline
SAF-T Assets (Declarației informative D406)
Deadline for the submission of Financial Statements for the year
EU Sales and Purchases List
Monthly 25th day of the month following the end of the tax period
Intrastat
Monthly 15th day of the month following the relevant month
VAT rates
19% 9% 5% 0% and Exempt
Intrastat thresholds
Arrivals: RON 1 million Dispatches: RON 1 million
VAT rules in Romania
Romania is at the forefront of VAT compliance, having implemented a broad range of requirements, from SAF-T obligations to e-invoicing. You can find more information on the various rules and requirements here:
Taxable persons established in Romania are required to register for VAT purposes if their annual turnover exceeds the threshold RON 300,000 (EUR 88,500). Established entities that don’t meet the threshold may opt to register for VAT purposes.
Non-established entities are required to register for VAT purposes, regardless of annual turnover, when practicing certain activities such as Intra-Community transactions or exports.
When does VAT liability apply in Romania?
In Romania, VAT liability encompasses various transaction types – including, but not limited to, the following:
Supplies of goods and services for consideration with place of supply in Romania
Imports of goods
Intra-Community acquisitions of goods
Invoicing requirements in Romania
Legislation in Romania states that invoices, paper or electronic, must include the following information:
Invoice unique serial number
Invoice/delivery date
Supplier identification
Recipient identification (when they are taxable subjects as well)
Description of the goods or services provided
Taxable amount
Applicable tax rate
Since January 2024, the Romanian B2B e-invoicing and e-reporting mandate has applied to established taxpayers and VAT registered entities – concerning all B2B transactions with place of supply in Romania.
From January 2024, VAT-registered entities must report their invoices (regarding domestic B2B transactions) to the RO e-Factura platform within five working days of issuance.
Established taxpayers are equally required to electronically report their invoices from January 2024.
The tax authority provided a three-month grace period where no penalties will apply, meaning that penalties will be imposed from April 2024.
From July 2024, the e-reporting obligation will shift to an e-invoicing requirement for transactions between established taxpayers. If established taxpayers fail to issue the invoice electronically, the invoice must be reported within five calendar days to the RO e-Factura platform.
In addition to the invoicing content requirements, which must also be included in electronic invoices, the e-invoice must comply with certain technical requirements as well.
You can find more information about Romania’s e-invoicing rules on our dedicated Romania e-invoicing page.
Registration for OSS in Romania
The EU established the One Stop Shop (OSS) in July 2021, implementing an EU-wide 10,000-euro threshold for VAT and simplifying cross-border online sales in the region simpler. This is part of the EU VAT e-commerce package.
Following the applicable Romanian VAT rules, the following fall within the scope of the OSS regime:
Entities established in Romania
Non-EU taxable persons with a fixed establishment in Romania
Entities which have fixed establishments in more than one EU Member State including Romania)
These entities may choose Romania as their Member State of registration for OSS purposes.
Non-EU entities, which do not have a fixed establishment in the European Union, may also register in Romania for OSS purposes – only if carrying out distance sales of goods when the goods are dispatched from Romania or any other EU Member State.
In addition to the OSS registration, taxable persons may also apply to the Import One-Stop Shop (IOSS) in Romania which concerns B2C distance sales of goods from outside the region.
Intrastat, EU Sales and Purchases List and Domestic Supplies & Purchase listing (form 394) in Romania
Intrastat returns – which are related to the movement of goods in the European Union – are submitted in Romania if the taxable person exceeds the provided threshold.
Even though Intrastat requirements remain similar across the EU, each Member State may implement rules differently. Our Intrastat Guide is a useful tool for navigating cross-border trading in the EU.
In Romania, the Intrastat threshold for both arrivals and dispatches of goods is RON 1,000,000 (around EUR 201,000). The Intrastat return must be submitted by the 15th day of the following month.
The EU Sales and Purchases List is submitted in Romania by taxable persons carrying out Intra-Community supplies or purchases of goods or certain services. The return must be submitted by the 25th day of the following month and is not required to be submitted in tax periods where no transactions occurred.
The Domestic Supplies & Purchase listing (form 394), first implemented in July 2014, is an additional return to be submitted periodically by all VAT-registered entities in Romania. The return includes data on domestic supplies and purchases between VAT-registered entities and must be submitted by the 30th day of the month following the end of the tax period.
The Romanian periodic VAT return – Decont de taxa pe valoarea adaugata – is submitted on a monthly or quarterly basis, if the taxpayers’ annual turnover remains below the equivalent in RON of 100.000 EUR. The returns must be submitted electronically by the 25th day of the month following the end of the applicable tax period.
The VAT return must include the amount of the deductible VAT as well as the VAT charged in the tax period.
Taxable persons established in Romania are required to register for VAT purposes if the RON 300.000 (EUR 88.500) annual turnover threshold is exceeded. There is no threshold for non-established entities.
Taxable persons not established in the EU that fall under the obligation to register for VAT purposes in Romania are obliged to appoint a fiscal representative.
Yes. Since January 2023, Romania‘s mandatory e-transport system has monitored the transport of certain goods in the national territory. The e-transport system operates in parallel with Romania’s e-invoicing system. For more information read our in-depth blog about the e-transport system in Romania.
Help for VAT compliance in Romania
Looking back at this overview, it becomes clear just how fast-paced Romania’s developing VAT compliance requirements are. Sovos helps customers navigate difficult VAT compliance landscapes worldwide, by leveraging our global coverage.
We take care of compliance so you can concentrate on growing your business.
In less than six months, Poland is going to introduce its long-awaited CTC clearance e-invoicing mandate – a tax reform that will impact a large amount of businesses.
It has been possible to issue and receive e-invoices voluntarily via Krajowy System E-Faktur (KSeF) since January 2022, but from 1 July 2024 it will become mandatory for suppliers and buyers that are in scope of mandatory e-invoicing to do this via KSeF.
A detailed understanding of the new regime, plus timely and proper preparation, is critical for compliance. Whilst there is a six-month grace period on financial penalties, non-compliance can negatively impact your business in many other, often unexpected, ways.
In this 45-minute deep-dive webinar, Marta Sowińska from our Regulatory Analysis and Design team will cover:
Introduction to the mandatory e-invoicing reform in Poland
Scope of the clearance mandate: domestic vs. cross-border transactions
Key challenges:
B2B vs. B2C transactions
Latest updates on QR codes
Emergency models – also known as offline modes
Key dates and implications of non-compliance
Join us on 8 February at 2pm GMT | 3pm CET for a thorough review of the Polish KSeF e-invoicing mandate and the opportunity to submit your questions.
As tax authorities continue to digitize processes in their mission to reduce fraud and close their VAT gaps, they are introducing requirements that provide greater visibility into a company’s financial operations in the form of Continuous Transaction Controls (CTC).
It would be a mistake to think that being prepared to meet obligations in one of the countries where you operate can simply be replicated in another – CTCs are far from a ‘one-size-fits-all’ solution.
Join us on 24 January 2024 in our latest quarterly VAT Snapshot webinar series where regulatory experts Dilara Inal and Marta Sowinska will examine how tax authorities in Poland, Romania, Israel, Greece and Spain – all simultaneously implementing CTC regimes – are doing so with different sets of requirements.
Don’t miss this opportunity to learn more about these unique regimes and what they mean for your business.
Poland is one of many countries to use the Standard Audit File for Tax (SAF-T) to streamline tax compliance and reporting for businesses. The country was one of the first in Europe to replace the traditional VAT return with SAF-T.
Poland introduced its version of SAF-T, known as Jednolity Plik Kontrolny (JPK), in 2016, making monthly submissions of JPK_VAT compulsory for all taxpayers in 2018.
In 2020, JPK_VAT combined with the VAT return and is submitted with a declaration per the frequency of the VAT Return (monthly or quarterly).
Submission of the remaining seven JPK structures is upon request of the tax authority in the event of an audit.
The Poland SAF-T framework consists of eight JPK structures:
JPK_V7M/K
declaration for records of VAT purchases and sales combined
JPK_FA
for VAT and VAT invoices
JPK_WB
for bank statements
JPK_PKPIR
for revenue and expense ledger
JPK_EWP
for revenue account
JPK_KR
for accounting books
JPK_MAG
for warehouses
JPK_FA_RR
for flat rate VAT invoices
Other than the monthly or quarterly periodic submission of JPK_V7M/K, submission of all other JPK structures is on demand.
However, from 1 January 2025, reporting of JPK EWP, JPW PKPIR, and JPK_KR will become a periodic reporting obligation.
Timeline SAF-T in Poland
1 July 2016: SAF-T introduced in Poland in the form of JPK files
1 January 2018: Poland mandated JPK_VAT for all taxable persons
1 July 2018: Taxpayers must be able to produce accounting documents in JPK structures
1 October 2020: JPK_VAT with declaration consolidates the VAT Return and JPK_V7M/K
1 July 2021: Amendments to the mandatory JPK_V7M/K adopted
1 January 2022: Amendments to the JPK_V7M/K structure including changes to better align it with the EU VAT e-Commerce package
1 January 2025: Reporting of JPK EWP, JPW PKPIR, and JPK_KR becomes a periodic obligation
Understanding JPK VAT and SAF-T in Poland
One of the eight JPK structures in Poland is JPK_VAT, a declaration combining VAT purchase and sales records. As of 2020, JPK_VAT must be sent alongside VAT returns to the tax authority.
JPK_VAT with the declaration has two variants, depending on the submission frequency of the VAT return:
JPK_V7M for taxpayers settling VAT monthly.
JPK_V7K for taxpayers who settle VAT quarterly.
Submission of JPK_V7M and JPK_V7K is on the 25th of the month following the reporting period.
The other SAF-T JPK structures for VAT are JPK_FA for VAT invoices and JPK_FA_RR for flat-rate VAT invoices. JPK_FA and JPK_FA_RR are both submitted on demand.
Implementing SAF-T as a business
SAF-T requires additional data to analyse and authenticate the accuracy of documentation. All data submitted in the SAF-T consolidated submission must be accurate and complete to ensure compliance.
Data for SAF-T requirements is often extracted from multiple sources for a single report and combining this data can be difficult.
The data required for SAF-T differs significantly from other reporting obligations that businesses might be familiar with. The XML format required for reports makes it difficult to review, compare or test reports ahead of submissions.
As well as Poland’s SAF-T requirements, taxpayers need to also be aware of the KSeF e-invoicing mandate. Poland’s continuous transaction control (CTC) e-invoicing system is mandatory as of 1 July 2024, expanding to VAT-exempt taxpayers in 2025. Read this overview for a general introduction toPoland VAT compliance.
JPK_VAT with a declaration is an electronic document that includes both VAT records, combining information on purchases and sales and VAT returns (VAT-7M and VAT-7K).
Yes, SAF-T is mandatory in Poland. JPK VAT with a declaration must be sent to the tax authority on a periodic basis, while other types of JPKs are sent on demand.
Failure to comply with the SAF-T requirements in Poland can lead to penal and fiscal sanctions, based on a misdemeanor or a felony. If the value of the reduction of the tax liability exceeds PLN 10,000, it is a crime.
Submission of JPK_VAT with the declaration (JPK_V7M and JPK_V7K) is on the 25th day of the month following the reporting period. Other JPKs are submitted to tax authorities within three days after receiving a request from the tax authority.
Our Solution capabilities for Poland SAF-T
Data Extraction
Painlessly aggregate and consolidate data from a wide range of source systems complying with Poland’s SAF-T requirements including JPK files.
Check the accuracy, integrity and quality of complex data structures required by Poland SAF-T to give you peace of mind before you submit your JPK files to the tax authority.
Ensure that all required data sets from accounting entries, sales and purchase transactions, asset depreciation, stock movements and more, are mapped seamlessly into Poland’s JPK schema, ready to be analyzed and submitted to the tax authority.
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:
1. Making the wrong VAT decision at the outset
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.
2. Not having a legally valid invoice
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.
3. Missing reporting deadlines
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.
4. Manual error
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.
5. Challenges with data extraction and mapping
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.
6. Not reviewing data prior to submission
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.
A reactive or ad hoc approach to tax compliance across the markets you do business in can mean the authorities have a better overall view of your data than your own internal teams. How confident are you that you have the same view of your data as the tax authorities?
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:
The Current Landscape of the Manufacturing Industry
VAT Challenges and Strategies
Futureproofing Your VAT Strategy
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.
Voluntary CTC e-invoicing, performed through service providers who must meet certain certification criteria
New generation cash registers which report B2C data to myDATA in real time
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 e-audit reform
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.
B2B e-invoicing reform in Greece
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:
Issuance of invoices according to certain format and content requirements
Protection of integrity and authenticity of the invoice
Reporting to myDATA according to the specifications
Compliant archiving of e-invoices and delivery to the buyer may also be performed
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.
B2G e-invoicing reform in Greece
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.
Looking ahead
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.
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.
1. Ensure alignment between IT and tax teams
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.
2. Continually establish and evolve processes to share up-to-date compliance documentation
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.
3. Recognise the consequences of non-compliance
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.
4. Regularly review your indirect tax strategy
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.
5. Use automation and cloud-based solutions
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.
5 Questions Every Non-EU Manufacturer Must Ask when trading in the EU
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:
Germany – Introduction of a new CTC mandate for mandatory e-invoicing
Malaysia – Key features and the phased implementation of the upcoming CTC mandate
Israel – Scope of the new clearance regime, and details on the ‘pilot programme’ rollout
Croatia – Scope of the new e-invoicing and CTC reporting system
France – Recent changes to the timeline and a closer look at some of the key features that make up the French mandate
Poland – Core details for the forthcoming July 2024 e-invoicing mandate
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.
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.
What are Intrastat thresholds?
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.
How can I calculate Intrastat thresholds?
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.
Intrastat thresholds in 2024
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
Intrastat threshold exemptions and exceptions
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.
If you are interested in learning more about European VAT compliance, download our free eBook.
How Sovos can help with Intrastat
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
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:
The nature of transaction (NoTC)
The value and quantity of the goods
The VAT number of the reporting party
The reference period (in MM/YY format)
The Member State goods are dispatched to or from
Intrastat code (also known as commodity code or Combined Nomenclature)
The trade flow (dispatch/arrival)
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:
The country of origin of the goods
The EU VAT number identification of the partner operator in the country of arrival
Optionally, Member States can also opt to ask for:
Mode of transport
Delivery terms
Intrastat return
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.
Do I need to submit an Intrastat return?
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.
Intrastat 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.
Intrastat numbers
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.
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.
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.
Who needs to file Intrastat?
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.
What is Intrastat reporting in Europe?
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.
What is an Intrastat code?
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).
Sovos’ recent observations of audits by EU Tax Authorities are that Tax Officers are paying more attention to the contents of One Stop Shop (OSS) VAT Returns. They have challenged, and even excluded, companies from this optional scheme.
OSS VAT returns must contain details of supplies made to customers in each Member State of consumption by the taxable person. Supplies that need to be reported are as follows.
Non-Union scheme
Supplies of services to non-taxable persons taking place in the EU. This includes supplies of services taking place in the Member State of identification.
Union scheme
Supplies of services made to non-taxable persons taking place in a Member State in which the supplier is not established. This includes the intra-community distance sales of goods.
Additionally, a taxable person can also declare domestic supplies of goods for which they are a deemed supplier in the Union scheme.
OSS VAT Return exemptions
A taxable person might be excluded by the Member State of identification from the scheme for several reasons. Considering the most common reasons, it’s important to note the following:
Reminders to submit an OSS return have been sent to the taxable person (or their intermediary) for three preceding return periods, and no VAT return has been submitted for the respective return period within 10 days of the reminder being sent
Reminders to make a VAT payment have been sent to the taxable person (or their intermediary) for three preceding return periods, and the full amount has not been paid within 10 days of receiving each of these reminders – unless the outstanding amount for each return is less than EUR 100
Let’s look at two case studies to further demonstrate the above.
Frequency of OSS VAT Returns
A taxable person submits a quarterly OSS return and pays the VAT owed by the last day of the month, following the end of each quarter. If they have not sold any goods in the EU during a tax period, they should submit a nil return.
OSS VAT Return deadlines
Taxable persons must submit their quarterly OSS VAT returns according to the following schedule.
Quarter 1: 1 January to 31 March
Submission period: 1-30 April
Quarter 2: 1 April to 30 June
Submission period: 1-31 July
Quarter 3: 1 July to 30 September
Submission period: 1-31 Oct
Quarter 4: 1 October to 31 December
Submission period: 1-31 January
If the due date falls on a weekend or bank holiday, the deadline is not moved to the next workday.
Case Study 1
A company, established and VAT registered in Spain, applied to the optional OSS Scheme under the Union scheme.
This company has an e-commerce store and customers can request delivery to their premises in any EU Member State. Under the terms and conditions on the website, the company clarifies that this channel is only for private individuals.
However, during an audit carried out by the German Tax Authorities, it has been noticed that some supplies are carried out in favour of business customers.
In some cases, the business customers have just shared their company name. In other cases, the companies have included their German VAT number in the purchase order on the internet (e.g. under “Additional comments”) and this information has been included on the invoice issued by the Spanish company.
Under these circumstances, the German Tax Office has provided the Spanish company with a warning as:
The OSS VAT Return cannot include B2B supplies
German VAT has been accounted for by the Spanish company and recovered by the German business customer – however, this supply is not subject to German VAT but should be zero-rated in Spain according to art. 138 of the EU VAT Directive
An amendment of the OSS Return was required
Case Study 2
A company established and VAT-registered in Turkey applied to the optional OSS Scheme under the Union scheme in Slovakia.
This company has an e-commerce store and customers request delivery from Slovakia, where the main supplier of the Turkish company is located, directly to their premises in any EU Member State.
Due to financial issues, the Turkish company has not paid its VAT liabilities despite submitting the OSS VAT returns on a timely basis.
Slovakian Tax Authorities have decided to exclude the company from the OSS Scheme.
Under these circumstances, the Turkish company:
Will remain excluded from using any of the three schemes (OSS Union Scheme, OSS Non-Union Scheme and IOSS) for two years
Must be ready to incur penalties and interests for the late VAT payments in any EU Member State where the supplies were carried out (up to 27 audits)
Will be required to register for VAT in each Member State they carry out supplies – no threshold is applicable for companies that are established outside the EU
What’s next for OSS?
The information about the supplies, available from EU Tax Authorities, will increase massively with the implementation of the Central Electronic System of Payment information (CESOP).
On 18 February 2020, the EU Council adopted a legislative package requesting payment service providers to transmit information on cross-border payments originating from Member States and on the beneficiary (“the payee”) of these cross-border payments.
Under this package, payment service providers offering services in the EU will have to monitor the payees of cross-border payments. They will have to transmit information on those who receive more than 25 cross-border payments per quarter to the administrations of the Member States.
As mentioned by the Tax Authorities:
The objectiveof this new measure is to give tax authorities of the Member States the right instruments to detect possible e-commerce VAT fraud carried out by sellers established in another Member State or a non-EU country
This information will be stored, aggregated and cross-checked with other European databases and made available to anti-fraud experts in Member States via a network called Eurofisc.
Payment Service Providers in the EU will need to report cross-border payments on a quarterly basis as of Q1 2024, with the first report due by 30 April 2024.
Sovos’ recommendations
We suggest double-checking the quality of the data included in your OSS Returns to the possibility of exclusion from the scheme.
With the publication of Resolution 097-2023, the National Superintendency of Customs and Tax Administration of Peru (SUNAT) has established the procedure for refunding the general sales tax (IGV) to tourists.
The establishment of this facility previously required a series of reforms and adjustments to Peruvian regulations. This regulation is preceded by Supreme Decree No. 226-2020-EF which modified the regulations of the General Sales Tax and Selective Consumption Tax Law to incorporate tax refunds for tourists – defined as foreign natural persons not domiciled in the country and who remain for no more than 60 days.
At the beginning of 2023, SUNAT published Resolution 005-2023 through which the regulation of payment vouchers and the rules on electronic issuance were modified. The administration changed the rules to allow the issuance of invoices to tourists entering the country.
This invoice can be issued at authorised establishments when goods are sold. In this case, the identification data of the purchaser will not be RUC but a passport.
SUNAT published Resolution 091/2023 in April 2023 to establish rules for the Register of Authorized Establishments (REA) to regulate the registration, permanence and exclusion of taxpayers for the right to return the IGV to tourists.
VAT Refund Procedure for Tourists
On the date of their departure from Peru, tourists who have not exceeded the authorised time of stay in the country can initiate the return procedure with the collaborating entity. Tourists can use the self-management kiosk or the mobile application, which is available inside international air or sea terminals.
The VAT refund procedure for tourists is as follows:
The tourist must enter their identity document into the self-management kiosk or the mobile application. It must be the same one provided for their TAX FREE records. In the case of the mobile application, they must scan the QR code.
Select the certificates that correspond to the goods that the tourist bought and is taking abroad.
The system will assign the channel: red or green.
Red: The tourist must go to the SUNAT staff located at the checkpoint to show the identity document, the goods purchased and the electronic invoices that support their purchases.
Green: Validates that the credit or debit card number to pay the IGV refund corresponds to the tourist. This validation also applies to those who were assigned the red channel.
If the information is validated, the system generates the return request.
The payment to the credit or debit card will be made within five calendar days from the request being registered, discounting the commission that the collaborating entity charges for this service.
Checkpoint Enabled
The checkpoint has been enabled since 2 May 2023 in the pre-boarding control area on the first floor of the Jorge Chávez International Airport.
Sovos is one of a short list of applicants to register as a Partner Dematerialization Platform (PDP). The company, with its 20 years of international business process and data expertise in international tax compliance, will benefit from an SAP extension, one of the few available on the market.
London, 27, June 2023 – International tax compliance software provider Sovos announces its application for registration as a dematerialization platform partner (PDP).
France is introducing a major e-invoicing and e-reporting reform which will be rolled out in a phased approach initially to the largest companies from 1 July 2024 and run beyond 2026. Since the beginning of May this year various software publishers and ERPs have been able to submit their applications to the French government to become an approved PDP.
PDPs are playing a key role in this VAT reform. As trusted third parties, these portals will act as the interface between companies and the French government and will be directly involved in issuing and receiving invoices. The aim is for companies to choose the methods and formats for exchanging their electronic invoices (incoming/outgoing) with the obligation to communicate invoicing, transaction and payment data to the authorities.
International e-invoicing experience
Sovos has 20 years of business process and data expertise and a global reach with modern cloud architecture that currently processes over 6 billion compliant transactions a year.
The company has extensive experience as a delegate of tax authorities around the world, with several certifications already obtained in various countries in Latin America, as well as in Turkey, where electronic invoicing is now well established. In addition, Sovos is set to be one of the only platforms to feature an extension for SAP, which is designed to provide dematerialization operator (DO) capabilities.
“We’ve seen high demand for a demo of our solution and initial demonstrations to many of the companies that rely on Sovos have been extremely positive and have provided valuable feedback. Our solution not only integrates the legal and technical requirements for France, but also leverages all the best practices from our decades of experience, and the compliance suite we’ve built, supporting complex obligations for tens of thousands of companies in other jurisdictions” says Cyril Broutin, Product Manager at Sovos.
Providing agility and anticipating future regulatory changes
E-invoicing regulations are regularly modified and updated and are therefore constantly evolving. In Italy, for example, the e-invoicing mandate has been revised more than 40 times. In France, the tax authorities have already published four versions of the specifications for the next reform, which are likely to be further amended or supplemented. Added to this is the European “VAT in the Digital Age” (ViDA) initiative and the many changes it will bring. Sovos intends to assert itself as a PDP capable of supporting companies over the long term, taking into account the regulatory changes which will occur after the application of the reform, at both national and European level. Indeed, the e-invoicing reform is part of a more global drive to digitalize taxation.
“Sovos believes that companies want to remain agile and not be held back by the changing compliance requirements they face in France and around the world. That’s why we’ve adopted a deliberate strategy of loosely coupling tax compliance obligations with the process automation requirements sought by businesses. Our aim is to enable companies to focus on their core business by removing the friction of complex tax digitization mandates. ” explains Cyril Broutin.
About Sovos
Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting, and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe and is owned by Hg and TA Associates. For more information visit sovos.com and follow us on LinkedIn and Twitter.
Implementing certified add-ons in SAP S/4HANA on-premise or a private cloud environment will allow you to expand the capabilities of your system. However, it is necessary to maintain a pristine core by strictly adhering to the most effective procedures.
This blog details the most important steps companies should take to design an add-on with a clean core.
Keeping a clean core
Ensure that all umbrella modules of the add-on have been SAP certified for SAP S/4HANA compatibility. This will prove that the add-on satisfies the requirements for integration and avoid investment risk for non-certified modules that use objects forbidden by SAP.
For each major release from SAP, non-certified modules may no longer work to the expected requirement. At Sovos, we make it a point to guarantee that all of our SAP modules are certified against the latest releases. Examples of these modules include VAT Determination (Sales, Purchasing, Monitoring & Reporting, and VAT ID Validator) and continuous transaction controls (CTC) frameworks.
Perform your due diligence when selecting a software provider: It is important to consider a provider’s track record, experience, customer service, and reputation for supplying dependable tax solutions. Make sure prospective vendors are financially stable and invest in certification and continuous research and development. You should consult tax experts for direction in this matter.
Further clarify the add-on’s scope: Identify potential overlaps or conflicts with the functionalities currently in SAP S/4HANA.
Conduct a comprehensive analysis of the existing business processes: Harmonise or replace unnecessary changes with the fundamental capability offered by SAP S/4HANA.
Adaptation and configuration: Change the add-on’s settings to satisfy business requirements while minimising the number of modifications made and depending on the default capabilities.
Data migration and integration: Carry out data migration while mapping relevant data to achieve add-on integration with existing data and processes.
Testing and validation: Conduct extensive testing of the add-on’s functionality and integration, covering all procedures from beginning to end and existing custom developments.
It is important to provide comprehensive user training on the add-on’s functionalities and document changes or upgrades made throughout the installation.
Using the appropriate software is essential for compliance and efficiency when dealing with indirect taxes. Avoid taking quick routes. Make a choice based on accurate information that helps tax procedures run smoothly.
By adhering to these standards, businesses can successfully implement certified add-ons into SAP S/4HANA while keeping the system core clean. This method, which restricts the use of customisations, prioritises the employment of standard functions and ensures an uninterrupted connection – resulting in the production of an SAP S/4HANA system that is highly effective and optimised.
In July 2023, the French authorities postponed the implementation timeline. A new timeline will be announced with the adoption of the finance law for 2024.
When your organisation trades cross-border, regular changes to the regulatory landscape are a given. Whether those changes are brand-new requirements in a country where you do business or the evolution of existing legislation, you must be ahead of the developments to remain compliant.
With global tax authorities continually making progress with their digitization strategies, the e-invoicing revolution continues at speed.
In this quarter’s instalment of our VAT Snapshot webinar, Kelly Muniz and Enis Gencer from Sovos’ Regulatory Analysis and Design team, will look in detail at anticipated changes in countries with emerging digital strategies and discuss updates to some of the more established regimes.
They will cover:
The introduction of continuous transaction controls (CTCs) in Israel and Malaysia in 2024
Expected developments in Spain, including the Bizkaia Batuz mandate effective from January 2024
Latest developments in e-invoicing in France and the role of Partner Dematerialization Platforms (PDP)
Join our 30-minute update on 13 July for the latest news, and for an opportunity to put your questions to our speakers.