VAT compliance in Europe

The VAT guidelines define a legal framework for VAT rates in the EU, but they allow member states to set the number and the level of VAT rates.

• The standard VAT rate, which applies to all non-exempt goods and services, may not be less than 15%.
• Reduced VAT rates may be applied to the goods and services listed in annex III of the VAT guidelines. They do not apply to services offered by electronic means; they may not be lower than 5%.

There are a number of exceptions to the standard rules.

Read more about the VAT rates in Europe on the MATHEZ FORMATION blog, and download the PDF sheet of 2018 VAT rates in EU.

With the elimination of customs borders in 1992, two documents for tracking exchanges between countries in the EU appeared:

• intrastatto enable the administration to establish statistics related to external trade.
• Summary reports of sales ("EC sales list"), or, in some countries purchase reports ("EC Purchases List") to monitor the flow of merchandise across the community (VAT).

The majority of the member states of the European Union have separated these two obligations, and most often the EC sales listis included as an annex to VAT declarations. Francechose to combine these two obligations on the Goods Exchange Declaration / Déclaration d’Echanges de Biens (DEB):

• upon introduction, the DEBrepresents a statistical tool only, and becomes mandatory once the defined threshold for the calendar year underway or previous calendar year has been surpassed (N or N-1),
• at shipment, the DEB is a fiscal tool from the very first euro (audits cross referenced among member states) and it also becomes a statistical tool once a certain threshold has been reached.

MATHEZ FORMATION maintains theDEB/ESL/INTRASTATs thresholds in each of the 28 countries of the European Union.

To outsource and secure your DEB, DES, and Intrastat declarations, contact MATHEZ INTRACOM, the number one third party declarant in France

Entering EU and international markets in full compliance with local VAT regulations is essential to ensure the sure growth of your business activities abroad. Some operations may make a foreign VAT registration mandatory and they may involve other declarations requirements.

Designating a tax representative allows you to perform activities that are subject to VAT in various member states within the European Union, and it also helps you meet your tax obligations, by dispensing with the need to create a branch of your business in each of these countries.

Your tax representative will handle all the formalities linked to registrationwith the VAT, and will represent your interests with respect to administrative authorities, and will take on your declaration requirements in full compliance with tax legislation.

To find out more, consult with EASYTAX.

A certain number of business activities may make it mandatory to have a VAT identification in a foreign country, and they may require other declaration obligations:
• Storage platforms (product flows inside and outside the European Union).
• Online sales.
• Delivery of goods along with installation or assembly.
• Consignment stocks.
• Sub-contracting abroad followed by deliveries directly to the end customers.
• Real estateconstruction projects.
• Purchase-resalein the same country.

Regulation is complicated and there are many specific types of cases to prepare for. Don't hesitate to consult our specialists for an analysis of your particular situation: contact EASYTAX.