Intrastat, VAT and the beginning of the new year

Intrastat, VAT and the beginning of the new year

Barbora Halousková, Andrea Kleinová
19/11/2021
Intrastat, VAT and the beginning of the new year
As standardly happens, the end of the year is a time not only for legislative changes but also for the possibility of tax entities to apply for statutory allowed or required changes in reporting activities towards the tax authorities. In the following text, we will focus on the Intrastat area and the change of the tax period, both related to the area of value-added tax (hereinafter referred to as "VAT").

Intrastat starting as of 2022

In the area of Intrastat, there is a change in the directly applicable EU legislation on statistics on trade in goods between the EU Member States. The first area affected is terminology. From January 2022, we will no longer report movements of goods as acquisitions or dispatches of goods, but as imports of goods from another Member State or exports of goods to another Member State.

Another area of change is the scope of the data to be reported, which is being extended in certain areas. The change does not affect the import side; however, on the export side, the reporting obligation is extended to include information on the state of origin of the exported goods and the VAT identification number or similar identification number used for VAT purposes assigned to the business partner entity in the EU Member State where the goods will be exported. In case that the business partner does not have such a number or if the reporting unit (hereinafter “RU“) simply does not know it, the code QV123 will be used.

There are also quite significant modifications in the transactions’ nature codes. The code converter is available for download on the website of the Czech Statistical Office (only in Czech).

The change shall also slightly affect method of reporting of supplementary units of measurement. These will now be rounded, like the weight, mathematically to whole numbers. If the value of a unit of measurement is less than one, the value will be rounded to three decimal places.

We also recommend checking whether you are not affected by the aggregate reporting of small consignments, the limit of which has now been increased from the previous EUR 200 to EUR 400.

If you find yourself in a situation where the time delay between the physical movement of goods and the taxable supply is more than two calendar months, the reference period is based on the physical movement. It is still applied that the RU has the option of using either the date of physical movement of goods or the date of the taxable supply as relevant for reporting in the reference period. From our point of view, the second option is more practical, as the information in the Intrastat report should thus correspond to the VAT return, which can be checked by the Customs Office.

Simplified reporting

The biggest novelty brought by the new legislation is the introduction of the so-called simplified reporting, which lies in the possibility of submitting only one report per year without specified details. Such simplified reporting can be used by the RU whose values for reporting Intrastat data in both the current and the previous year range from CZK 12 million (the threshold above which the obligation to submit Intrastat reports arises) to CZK 20 million including, in each individual direction, i.e. separately for the import direction and separately for the export direction. However, this is possible only if the RU does not trade and did not trade in the previous year in commodities listed in the Communication of the Czech Statistical Office on the list of goods not intended for simplified reporting.

In practice, this will mean that if a RU has not exceeded the value of imports or exports within the EU of CZK 20 million in 2021, and expects to do so in 2022, it will only submit a simplified report "in advance", namely for reference period of January 2022. If RU exceeds the upper limit of CZK 20 million during 2022, it would be obliged to submit monthly reports from the reference period in which the value was exceeded.

So-called one hundred percent credit note

The last change we would like to inform you about in connection with the changes to Intrastat is related to the so-called 100% credit note, i.e. a refund of the entire price paid for the delivered goods. Until the end of 2021, the rule is being applied that the data in the report containing the original transaction are not corrected in the case of a 100% credit note and, on the contrary, only those transactions where there is a partial price reduction with a difference of at least 5% of the original price are corrected. However, according to the new rules, since 2022, not only transactions with a partial price reduction but also transactions with a fully reduced price must be corrected in the original statement. This situation applies to transactions where there has been no physical return of goods.

However, how will the transaction be reported in the case of a 100% credit note if the physical return occurs and, in addition, the report has already been submitted to the Customs Authorities? In this case, it is considered as the so-called re-importation of the originally exported or re-exportation of the originally imported goods, which is usually indicated by the transaction code "21".

Change of the tax period for VAT

As of 1 January of the new year, the VAT payer has the possibility to change the tax period from a calendar month to a calendar quarter, provided that the statutory conditions are met.

These conditions are as follows:

  • the turnover for the immediately preceding calendar year, i.e. in this case for 2021, has not exceeded CZK 10 000 000,
  • the taxpayer is not considered to be an unreliable taxpayer,
  • is not a group, and
  • a notification of the change of the tax period is delivered to the tax administrator by the end of January of the relevant calendar year.

Nevertheless, the easiest way to change your tax period is to do so through the December VAT return which shall be submitted by 25 January of the following year.

Of course, should the taxpayer's taxable period already be a calendar quarter, he does not need to take any action.

However, beware if you have just recently registered for VAT, as it is not possible to apply for a change of tax period in the year in which the taxpayer was registered or in the following year. Only in exceptional cases and based on a request submitted by the taxpayer by the end of October in the year of registration, the tax administrator can decide that the tax period will be a calendar quarter already in the year following the year of registration.

If a quarterly taxpayer becomes an unreliable taxpayer, his tax period becomes a calendar month after the end of the calendar quarter in which he acquired this status.

In the end, we would like to point out that due to the obligation of legal entities to submit VAT ledger statements on a monthly basis (except for nil reports), they remain subject to this obligation as taxpayers even if their tax period is a calendar quarter.

Whatever topic you were interested in and/or would you like to ask our experts for further details, please do not hesitate to contact us.

 

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Andrea Kleinov√°
Andrea Kleinová
Certified Tax Advisor
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