Deadlines for Businesses Filing EU VAT Returns
Every quarter, all companies and individuals running an online businesses selling digital products to costumers in the EU must file tax returns for EU VAT remittance. It’s the business’ responsibility to comply and file on time to avoid fines.Matt Hagemann
Published July 27, 2019
Selling digital products online can be a lucrative business. Before you start to accept orders from EU customers, ensure whether your business is required to register for VAT OSS (One-Stop Shop). Our article about EU VAT rules will help you establish whether you meet the requirements.
VAT OSS is a centralized scheme to account for EU VAT. It replaces the MOSS (Mini One-Stop Shop) scheme since July 1, 2021. Like most other product categories, electronically supplied services (or commonly known as digital products) are subject to VAT. You apply and charge your customer’s local VAT rate (e.g. 19% in Germany).
Businesses are responsible for charging a VAT against their customer’s invoice on behalf of tax authorities in the European Union.
You need to remit the collected VAT through the OSS scheme when due. All your supplies to end-customers in the EU during the reporting period are compiled with the accompanying VAT. You sum up the value of all supplies to each individual Member State and select the applicable VAT rates.
VAT remittance is performed on a quarterly basis. The tax return must be filed electronically by the business to the tax authority no later than the 20th day following the end of the calendar quarter. This means that the tax return must be transmitted for:
- 1st calendar quarter by 20 April,
- 2nd calendar quarter by 20 July,
- 3rd calendar quarter by 20 October,
- 4th calendar quarter by 20 January (of the following year).
Technically, you are given 20 days to compile and file your VAT returns. Even if no sales were carried out with EU customers in the relevant calendar quarter, a “nil return” must be submitted. Failing to file will trigger reminders and potential fines.
Due Diligence Before Deadline
VAT rates are different across the 28 EU countries. Each country in the EU has its own VAT rate. Having customers across the EU can mess up your quarterly reporting if wrong VAT rates are applied during charges. Inaccurate reporting will tie up resources and cause unnecessary costs.
You can look up the correct VAT rate for every Member State automatically in our database of VAT rates to keep your rates up-to-date.
Furthermore, if you have business customers who provided their VAT number, validating them once again before a deadline is recommended. VAT registrations can expire. In such cases you have to ask your customer to provide their new VAT number or treat them like a consumer again by charging VAT.
We’ve also written a tutorial that shows you how you can automatically re-validate a VAT number shortly before an invoice becomes due.
You will immensely benefit from our end-to-end VAT reporting facility. Hook up Vatstack with a payment provider like Stripe, and you can have all your transactions synchronized. By the due date, your reports are available and accurately calculated.
Receive a Reminder When VAT Filing Is Due
Vatstack gives its users a free service by reminding them when VAT filings become due. Create a free account with Vatstack and receive a notification shortly before you should prepare your VAT OSS reports.