In a VAT return (or ‘declaration’), a taxable person (business) gives the tax authorities in the EU country where they are registered 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).
Who has to make a VAT return?
- VAT returns by businesses
- VAT returns by non-taxable legal entities
- VAT returns by tax representatives
Special rules for certain transactions:
How often do returns have to be made?
This depends on which EU country the business is registered in. The VAT Directive says that returns have to be made 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. But 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. And 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. But the national tax authorities must allow you to submit your return online, if you want to.
VAT returns by businesses making taxable (taxed/exempt) supplies
What information must a VAT return contain?
All the information needed to calculate:
- the tax that has become chargeable (output VAT) and
- the deductions to be made (input VAT).
If needed to establish the basis of assessment, the return must also contain the total value of related transactions and any exempt transactions (Article 250 VAT Directive.
Returns must also contain, for the return period, the total value (excluding VAT) of:
- supplies 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
- 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 is, as the customer, liable for VAT (see Article 197 VAT Directive) and on which VAT has become chargeable.
VAT returns by non-taxable legal entities
Non-taxable legal entities may sometimes have to pay VAT on intra-EU acquisitions of goods. Where they do, they must submit returns in the same way as businesses if:
- the supplier does not qualify for exemption under the special scheme for small businesses or graduated relief (see Special schemes – small enterprises) and
- the supply is not considered to have taken place in the EU country where
- the dispatch or transport of goods ends (Article 33 VAT Directive- see Where to tax - supply of goods with transport) or
- the goods are installed or assembled (Article 36 VAT Directive - see Where to tax - supply of goods with installation or assembly).
VAT returns by 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 in the same way as the business.
Customers liable to pay VAT
Customers who are liable to pay VAT on a transaction need to include this in their VAT return – for example when they:
- receive supplies of natural gas, electricity, heat or cooling energy from a supplier in another EU country (see Supplies of natural gas, etc.)
- receive services in the EU country where they are based from a supplier who is not based in their EU country (see Services supplied where the customer is located)
- receive supplies for which they are liable to pay the 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 Obligations - triangular transactions)
- are the customer in a transaction involving investment gold, gold material, or semi-manufactured products and which is taxed (see Obligations - transactions with investment gold).
New means of transport
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,
EU countries must make sure that the supplier provides all the information necessary for VAT to be properly charged.
(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, then they must make 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.
(Articles 257-258 VAT Directive)
Returns must be made for intra-EU acquisitions of goods subject to EU harmonized 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 goods are acquired.
EU countries are responsible for laying down detailed rules on returns for this kind of transaction.
(Article 258 VAT Directive)
Imports from outside 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)