3.1.     VAT (Value Added Tax)

 

‘What are the VAT tariffs in the 25 Member States?’
‘How can a company invoice VAT on services or works which are executed in another Member State?’
‘How can a company control the validity of a VAT identification code of a client based in one of the Member States?’

For an answer to these questions, look into the website presented below.

 

 

Information source:            European Commission – DG Taxation and Customs Union

Website:                                             http://ec.europa.eu/taxation_customs/taxation/index_en.htm

 

               
To find info about VAT follow the steps.

Step 1:   login to the website (click on the link above), followed by one or more of following steps, depending of the  kind of information needed.

Step 2:   click on ‘VAT – How VAT works – Rates’ for info about the VAT rates applied in the Member States of the European Union.

Step 3:   click on ‘VAT – Traders – VAT in the Community’ for info on the application of VAT in the Member States.

Step 4:   click on ‘VAT – Traders – Invoicing rules’ for info on correct VAT invoicing for transactions with Member States in the EU.

Step 5:   click on ‘VAT - Traders – Checking a VAT number – database’ for info on VAT identification codes of EU companies.

 

 

Shifting VAT for imports to the periodical VAT declaration

“Shifting VAT” or “transferring VAT” means that a company does not have to pay VAT at the moment when imports take place.  The importer “shifts” the payment of VAT to the periodical VAT declaration.

When the importer has the right to deduct VAT paid on goods and services that he bought from his suppliers, then this VAT can be deducted from VAT to be paid.

Companies have to mention on this declaration the code no. under which an authorisation was given for shifting VAT.
Example
An enterprise has to pay EUR 10,000 VAT as a result of sales in his own country. His suppliers calculated an amount of EUR 5,000 VAT on their invoices. The company imported goods for which an amount of EUR 6,300 on VAT is due.
On his periodical VAT declaration, this company needs to mention:
VAT to be paid (in EUR)                                                            VAT to be deducted (in EUR)

Sales in the own country                 10,000                                VAT on invoices of suppliers           5,000
VAT on imports                                 6,300                              VAT on imports                              6,300

Total for VAT to be paid                  16,300                              Total for VAT to be deducted         11,300

Balance of VAT to be paid  =  EUR 5,000