Obligations of a VAT payer

If you are a VAT payer, or are considering the possibility of becoming one, you should know all the obligations that this status entails.

REGISTRATION OBLIGATION

If your turnover exceeds €49,790 over 12 consecutive months, you are obliged under Section 4(1) of the VAT Act to register as a VAT payer by the 20th day of the month following the month in which you reached that turnover, and you become a monthly VAT payer.

If, 12 months after registration, your turnover does not exceed €100,000, you can apply to the tax office to become a quarterly VAT payer under Section 77 of the VAT Act.

You can also apply for VAT registration voluntarily, under Section 4(2) of the VAT Act; this is what is known as voluntary VAT registration. However, you need to be careful: if your registration is refused, there is no possibility of appealing against that decision.

NOTIFICATION OF BANK ACCOUNTS

Under Section 6 of the VAT Act, a VAT payer is obliged to report every bank account of its own that it uses for business. If the payer uses bank accounts belonging to another person for business purposes, it may also report these accounts, but at the same time it is obliged to state the owner to whom these accounts belong.

If you have not filed a bank account notification, your excess VAT deduction will not be refunded to you.

Failure to meet this obligation can also result in a fine of up to €10,000.

FILING TAX RETURNS AND STATEMENTS

After registering for VAT and receiving your VAT registration certificate, you are obliged to file a VAT return and a VAT control statement monthly or quarterly.

The tax return adds up the input VAT and the output VAT and determines whether you will pay VAT for the month in question or whether VAT will be refunded to you (excess VAT deduction).

In the VAT control statement, you send the tax administrator data from all invoices received and issued, and summary data for all cash receipt documents, or the takings from your electronic cash register.

If you sell goods or services to the EU, you are also obliged to file an EC Sales List. In this, in turn, you send data from invoices issued to EU partners to the EU-wide VIES system.

PAYING VAT

If the VAT return you have filed shows a tax liability, the tax must be paid no later than the last day of the period for filing the VAT return.

• If you have an excess deduction (input VAT is higher than output VAT), you do not pay any tax. The tax office then waits to see what you file the following month.
• If, the following month, the tax payable is higher than the excess deduction from the previous month, you pay only the difference, and the rest is automatically offset against the excess deduction from the previous month.
• If the tax payable is lower than the excess deduction from the previous month, or there is again an excess deduction, the tax office sends the amount of the excess VAT deduction from the previous month to the taxpayer’s account within 30 working days of the day the VAT return was filed.