Tax Tips December 2019
VAT Information Exchange System (VIES)
VIES provides a mechanism whereby checks can be made in each Member State on the validity of claims to zero-rating. It helps to detect unreported movements of zero-rated goods between Member States.
Where a VAT registered person supplies goods or services to business customers registered for VAT in another EU jurisdiction, that person is required to complete a statistical return known as a VAT Information Exchange System (VIES) return. This is Ireland’s version of the EC Sales List/ESL.
The return does not extend to the receipt of supplies of goods or service by a VAT registered person. There is no threshold for the requirement to register for VIES, but there are some limited exceptions to this.
VIES returns are required to be filed on a monthly or quarterly basis. Monthly filing is required only where trader’s reportable supplies of goods are relatively significant. For traders that have only reportable supplies of services, returns can be filed quarterly irrespective of the value of the supplies made.
In practice, such returns must be filed electronically on or before the 23rd day of the month following the end of a monthly/quarterly period. For example, the quarter 1 VIES return is required to be filed on or before 23rd April.
VIES returns normally contain the following information:
- The trader’s VAT number
- The recipient’s foreign VAT number
- The total value of supplies made to each customer
- The indicator ‘S’ in the flag column where the supply relates to services
- The indicator ‘T’ in the flag column where goods were the subject of the triangulation procedure
Revenue and VIES, Intrastat and Mutual Assistance (VIMA) monitor the figures declared in boxes E1 and ES1 of trader’s periodic VAT returns to establish whether they should be registered for VIES. Despite this, the onus rests on the taxpayer to determine whether they should be registered.
It is common for tax authorities to collaborate on a cross-border basis in an effort to prevent, deter and detect fraudulent behaviour.
Intrastat is the system for collecting statistics on the movement of goods, not services, between Member States of the EU. The general concept of intra-EU trade statistics is independent from the ownership of the goods. It concerns only their physical movement.