VAT compliance in Europe is not an issue that can be underestimated nor disregarded. All companies having business operations with business based in other EU countries should wonder whether they are compliant with the VAT regulations in the countries where they sell and buy goods or services.
VAT compliance is much more than filing VAT returns. VAT compliances should indeed start with the analysis of companies cross border operations themselves, how the documents are issued, where transfers of ownership take place, what are the Incoterms uses, who between the seller or the buyer takes care of the transport, … Once all these questions (and many others) are clearly answered, then a reliable VAT compliance becomes possible.
The main difficulty about VAT compliance is that VAT returns are different in all countries and in some countries not available in English. Dates and periods of submission moreover not harmonized between the 28 E.U. Member States (+ Switzerland and Norway).
VAT compliance can then quickly become really challenging for businesses when they try to do it by themselves. In addition, as all EU countries implemented differently the European VAT Directive regulations in their own Tax codes, the VAT treatment of a the same transaction may be different from a EU country to another. This obviously makes VAT compliance almost impossible to handle internally especially for businesses that are registered for VAT in several EU-countries.
Being independent from any auditing or accounting firm allows RMB to provide « straight to the point » answers, without legal and theoretical background when not necessary. Companies expect from their partners answers or advice they can quickly and easily apply. This is also true for VAT compliance. RMB has been providing VAT compliance services for more than 35 years to companies that decided to outsource this matter and reduce their administrative costs.
RM Boulanger is one of the few independent firm really specializing in European VAT for cross border transactions. RM Boulanger provides VAT compliance and advisory services and is one of the major players in this field of activity. By appointing RM Boulanger to take care of your European VAT returns, you will ensure that your company is fully compliant with the European VAT regulations.
VAT compliance is a day to day mission and starts from the first day your company gets registered for VAT in some other EU-countries. From this day, your operations must be fully compliant with the country’s local rules and will have to respect strict deadlines. The risk of not being VAT compliant is to face a tax audit and have to pay penalties and late interests.
VAT compliance also requires efficiency and automated tools as the volume of data and documents to process can be significant. For these reasons our clients decided to outsource their VAT compliance to RMB. They then don’t have to worry about deadlines or specific local rules exceptions. In order to deal efficiently with the thousands of documents or data we receive from our clients, we built our own IT VAT tool. The data are integrated automatically in our system and all documents are scanned.
Collection of data
The first step of VAT compliance is the collection of data. Depending on the EU-countries, VAT returns have to be submitted on a monthly, on a bimonthly or on a quarterly basis. Based on this, our clients provide us with all their figures and documents related to the previous period so that we handle our VAT compliance mission properly.
Calculation of VAT
One of the most important part of our mission is the calculation of VAT as the aim of VAT compliance is to have VAT paid to the local Tax Authorities in due time. Even if the great majority of cross border transactions are exempt of VAT, VAT has to be calculated and reported in the right box of the VAT return.
VAT compliance also includes the application of the right VAT rates which are different according to the kind of goods or services sold. Again there is unfortunately no harmonization between EU-countries about VAT rates.
Filling of VAT returns
Once VAT is calculated and the operations reported in the right boxes of the VAT form, it can be submitted to the local Tax Authorities. This is actually the last step of our VAT compliance mission. For your information VAT returns are submitted electronically in most EU-countries and VAT payments can be done through bank transfers.