A VAT return is a declaration given by a taxable person (business) to tax authorities in the EU country where they are registered. It contains information about:
- their taxable (taxed/exempt) transactions
- the VAT they have charged their customers (output tax) and been charged by their suppliers (input tax)
- the amount of VAT payable (or refundable)
Businesses
In general, businesses making taxable (taxed/exempt) supplies must submit VAT returns. The VAT return must contain all the information needed to calculate:
- the tax that has become chargeable (output VAT), and
- the deductions to be made (input VAT)
The return must include, where required for establishing the basis of assessment, the total value of transactions subject to tax, the value of deductible transactions, and the value of any exempt transactions (Article 250 VAT Directive).
Returns must also contain, for the return period, the total value (excluding VAT) of:
- supplies of goods and services made within the EU on which VAT has become chargeable;
- goods dispatched or transported by or on behalf of the business from the EU country where the return is to be submitted to another EU country, or goods installed or assembled in another EU country on which VAT has become chargeable;
- intra-community acquisitions of goods from EU countries, or transactions treated as such, made in the EU country where the return is to be submitted and on which VAT has become chargeable;
- supplies of goods in the EU country where the return must be submitted and for which the business, as the customer, is liable for VAT and on which VAT has become chargeable (the so-called ‘reverse charge mechanism’).
Non-taxable legal entities
Some categories (non-taxable legal entities, exempt taxable persons, farmers under the flat-rate scheme) may sometimes have to pay VAT on intra-EU acquisitions of goods. Where they do, they must also submit a VAT return.
Tax representatives
Where a tax representative has been appointed as the person liable to pay VAT on a transaction on behalf of a business not based in that country, the tax representative must submit returns on behalf of the non-established taxable person.
Customers liable to pay VAT
Customers who are liable to pay VAT on a transaction under the reverse charge mechanism need to include this in their VAT return – for example when they:
- receive services in the EU country where they are based, from a supplier who is not based in their EU country (see 1.2 Services supplied where the customer is located);
receive supplies for which they are also liable to pay VAT under the reverse charge mechanism (e.g. construction services, waste material etc.) in certain EU countries;
are the final customer in a triangular transaction (see 1.3 Obligations - triangular transactions);
are the customer in a transaction involving investment gold, gold material, or semi-manufactured products and which is taxed (see 1.4 Obligations - transactions with investment gold)
New means of transport
EU countries must make sure that the supplier provides all information necessary for VAT to be properly charged in situations where an intra-EU supply of a new vehicle (car, boat, plane, etc.) is made by:
- a taxable person to a customer whose intra-EU acquisitions are not subject to VAT and who is not registered for VAT, or
- any other person making this kind of supply on an occasional basis
(Article 254 VAT Directive)
Where an intra-EU acquisition of a new vehicle is made by a taxable person or a non-taxable legal entity whose other acquisitions are not subject to VAT because they are exempt or fall under the intra-EU acquisitions threshold, they must submit a VAT return for these acquisitions.
The same applies if the acquisition is made by a private individual. EU countries are responsible for laying down detailed rules on returns for this type of transaction (Article 258 VAT Directive).
Excisable goods
Returns must be made for intra-EU acquisitions of goods subject to EU harmonised excise duty if:
- the goods are acquired by a taxable person or non-taxable legal entity;
- the excise duty is chargeable in the EU country where the intra-EU acquisition takes place
EU countries are responsible for laying down detailed rules on returns for this kind of transaction (Article 258 VAT Directive).
Imports into the EU
EU countries must make separate and detailed rules for accounting for importation of goods from non-EU countries. EU countries may require a separate return to be made for importation of goods from outside the EU or may allow accounting for those transactions in regular VAT returns (Article 260 VAT Directive).
Frequency of VAT returns
The frequency required for VAT returns depends on which EU country the business is registered in – but they must be submitted at least once a year (Article 252 VAT Directive).
In practice, many EU countries require returns every month or 3 months. In general, businesses with high turnover have to make returns more frequently. In addition to these ‘periodic returns’, annual returns may also be needed.
The deadline for submitting a return may not be later than 2 months after the end of the return period.
Do I have to make annual returns as well as returns for shorter periods?
In some EU countries, yes. Where it is required, annual returns must contain all the information required in periodic returns, plus the information needed to make any adjustments.
Do returns have to be made online?
In some EU countries, yes – but not in all. However, national tax authorities must allow you to submit your return online, if you want to.
Note that apart from the regular VAT returns, specific VAT returns exist for the application of e.g. the One-Stop-Shop (OSS) and the Import One Stop Shop (IOSS) special schemes