VAT compliance ensures the correct and timely fulfillment of tax obligations. It protects companies from legal consequences and financial losses.
Companies with cross-border activities must comply with laws and regulations in different countries. Accurate knowledge of and compliance with all requirements are required. This ensures that business actions are carried out correctly and strengthens the trust of customers and partners.
Knowing the Regulatory Framework
VAT is an indirect tax levied on the sale of goods and services.
In the European Union, VAT is regulated by the VAT Directive. This directive sets out the general principles for the taxation of goods and services in the EU. The directive is implemented into national law by the individual member states.
Using Information and Communication Systems
The member states of the European Union have introduced the One-Stop-Shop (OSS) system for cross-border sales and shipping from companies to private consumers. Registered companies can report and pay VAT for the Intra-Community Distance Sales of Goods business action for all EU countries centrally to their national tax office. This simplifies VAT compliance for companies that sell and ship to private consumers in other EU countries.
When companies use warehousing and shipping logistics in other EU countries, such as Amazon's fulfillment services (FBA) in the PAN-EU program, national registrations are required in these countries. VAT-relevant business actions must be reported in accordance with local laws, and payments due must be made. The large number of possible national and international business actions with different country combinations can lead to considerable administrative effort.
Meeting Compliance Requirements
Knowledge of requirements minimizes liability risks. To do this, business actions must be continuously checked for legal obligations. This requires a detailed understanding of operational processes and the relevant laws in each country.
Companies can optimize compliance and meet requirements by relying on software and compliance services as well as the expertise of tax advisors and lawyers . This support enables efficient use of resources for sustainable success.