In conducting business activity, entrepreneurs often conduct transactions with foreign partners, i.e. from other European Union or non-European Union countries. In order to correctly account for such transactions, taxpayers use a special number. This is the so-called VAT ID.
In conducting business activity, entrepreneurs often conduct transactions with foreign partners, i.e. from other European Union or non-European Union countries. In order to correctly account for such transactions, taxpayers use a special number. This is the so-called VAT ID.
Firstly, it should be emphasised that the VAT ID applies only to transactions with countries from the European Union. It is a tax identification number assigned to taxpayers so that they can make intra-Community transactions. The entrepreneur receives the so-called EU VAT ID number, which is preceded by a prefix appropriate for a given country. This additional designation identifies the country of origin of the entrepreneur using this number.
Intra-Community transactions may be made both by active VAT taxpayers and entrepreneurs benefiting from VAT exemptions. In case of active VAT taxpayers, the absolute obligation to register for VAT-EU takes place before the conclusion of a transaction:
- intra-Community acquisition of goods (IAC),
- Intra-Community Supply of Goods (IDP),
- intra-Community provision of services, in relation to which VAT settlements rest with the purchaser of the service,
- intra-Community acquisition of services
Taxpayers who are exempt from VAT (subjective or objective) must also register for VAT-EU before making transactions with an entrepreneur from another EU country, namely in the event of
- intra-community acquisition of goods (ICT)
For taxpayers using VAT exemption, who make WNT transactions, the legislator has provided an exemption from the obligation to have a VAT ID, and thus, from the registration to VAT-EU.
- Intra-Community supply of services, in relation to which VAT settlements rest with the purchaser of the service;
- an intra-Community acquisition of services to which Article 28b of the VAT Act applies.
What is the EU VAT return?
Entrepreneurs holding a European VAT ID who perform WNT, call-off stock, WDT or intra-Community supply of services transactions are required to send monthly a VAT-EU recapitulative statement. This document is not a form of tax return on the basis of which the VAT tax payable to the Tax Office is calculated. The VAT-EU recapitulative statement is for information purposes only and is a reporting document.
The VAT-EU recapitulative statement shall list transactions such as:
- intra-Community acquisition of goods
- intra-Community supply of goods
- intra-Community provision of services
- Intra-Community transactions and movements of goods under the call-off stock procedure
Deregistration of a VAT-EU taxpayer
In case of cessation of performing intra-Community transactions, an entity registered as the taxpayer of VAT EU shall be obliged to notify the Head of the Tax Office about this fact. By reporting the update of the registration notification (VAT-R) within 15 days from the occurrence of this circumstance. In case when the entity registered for VAT-EU does not submit VAT return for six consecutive months or two consecutive quarters.
The Head of the Tax Office has the right to strike off the entity from the VAT taxpayer register. Deletion of a taxpayer from the VAT taxpayer register is equivalent to deletion of the taxpayer from the EU VAT register. In both cases, the taxpayer shall be notified about striking off the register by the Head of the Tax Office.
More information, visit the website: https://europe-tax.com/
