European Commission paper on EC Sales Lists
The EC issued a report on 24 May 2012 on the impact of the changes across the EU, as required under VAT Directive 2008/117/EC (amending 2006/112/EC) with effect from 1 January 2010. The purpose of the amendment had been to speed up the information reporting by businesses in order to detect fraudulent activity more quickly. It was required that Member States introduced monthly reporting, allowing only quarterly reporting for small EU trade concerns.
EC Sales List requirements
EC Sales Lists are required to be submitted by businesses providing cross-border B2B intra-EU supplies of goods or services. The supplies being made are at zero-VAT from the supply business and the recipient businesses require to account for acquisition VAT in their own home states. The EC Sales List information logs the VAT numbers of the recipient businesses and the net value amounts involved. The information is available for access by all Member States tax offices as a means of control. Clearly there is an opportunity for fraudsters to take advantage of the zero VAT situation, and hence faster reporting would be considered to lead to minimising such activity.
The report provides information on how Member States applied the new amendment, and also how the changes have impacted on businesses in terms of costs.
Member States have not implemented the amendment in the same way e.g.:
- 17 States implemented the quarterly facility for the lower level intra-EU trading, while 10 States did not.
- 2 States have separate statements for Goods & Services and 25 have a combined statement.
- 22 States have electronic filing and 5 states have optional electronic filing.
Businesses had suffered increased costs, both in terms of one-off set-up costs and the on-going annual recurring costs. Businesses were examined in two sections, being either large companies or SMEs. Both had suffered, particularly the SMEs in relation to their turnovers. The average one-off set-up cost was €4,891 and the recurring annual cost was €9,237. There were differing reports from the businesses reported in the study. Some felt that apart from the initial set-up costs, there would be little impact. Others felt the cost impact more strongly, while some valued the data quality improvement, and potential reduction in possible tax fraud.
The report also points to a need for harmonisation across all States in terms of filings, and that businesses considered that this would lower costs. Filing period harmonisation coupled with simple and EU-uniform electronic monthly submission processes were also suggested by the companies involved.