The rules and regulations of global outbound platforms are gradually becoming more stringent, and the evolving policy framework is designed to ensure that every seller can operate in a legal and compliant manner in their business. In the area of taxation, countries have introduced policies emphasizing that sellers must meet their tax obligations on time, otherwise they will face severe sanctions such as fines, store closures and even product detention.
Although different countries have their own unique tax policies, there is consistency in terms of tax requirements to strictly stop tax evasion by sellers. Next, we will delve into the specific requirements for VAT filings in Germany, France, Italy and Spain, as well as the penalties for failing to meet tax obligations on time.
The UK VAT was introduced in the last issue, and you can click the link to review: From January 2023, the UK will be fined for late tax and late payment!
Recently, Germany set up the Berlin International Tax Office, which is responsible for handling VAT registration for overseas companies. At the same time, the prefix of the German tax ID number has also been changed from "16" to "15". In this update, the tax identification number (steuernummer) bound to the e-commerce platform needs to be modified synchronously to avoid causing abnormal conditions in the store.
1 Frequency of VAT filings in Germany.
Monthly report: December + 1 annual declaration.
Quarterly report: 4 quarters + 1 annual declaration.
Annual: 1 annual declaration.
The standard tax rate is 19% and applies to most goods and services. The deadline for annual reporting is July 31 of the following year, and if it is an annual filing cycle, it is recommended to file before January 10, because the tax office will assess the filing frequency of the next year based on the previous year's filing. In the case of self-tax customs clearance in Germany, the import VAT can be deducted through the EORI number.
Note: The tax payable in the previous year corresponds to the declaration frequency of the next year as follows (excluding withholding and payment, which is paid by the seller to the tax bureau).
1-1000 euros, the next year is the annual report;
1000-7500 euros, the next year is quarterly;
More than 7,500 euros, the next year is a monthly report.
2. Calculation formula.
Import VAT = (declared value + customs duty + freight) 19%.
Sales VAT = Sales 19 (1+19%)+19%.
Actual VAT paid = VAT on sales - VAT on imports
3 Penalties for late filing and late payment of VAT in Germany.
Late filing: a penalty of 10% of the declared tax, up to a maximum of €25,000.
Calculation: Declared tax (value taken as a multiple of 50) 10%.
Late payment of tax: 1% for every 50 euros of the tax, resulting in a late payment penalty that is added to each month.
Calculation: Declare tax 50 (before the minimum point) 05 Months overdue.
4. Tax exemption policy.
VAT exemption on imports from Germany after July 1, 2021.
The filing cycle for French value-added tax (VAT) is flexible and can be carried out on a monthly or quarterly basis. The tax office has set a deadline for monthly and quarterly returns, that is, before the 24th of each month, and if it falls on a holiday or weekend, the deadline will be extended to the next working day.
1. Penalty for late declaration.
For late filings, French VAT VAT will incur corresponding penalties as follows:
The late payment penalty is 5% of the tax due.
Late filing penalties are based on the circumstances in which the notice is issued:
If the IRD has not issued a notice, the penalty is 10% of the tax;
If the declaration and payment are not made within 30 days, the penalty is increased to 40% of the tax;
Upon receipt of the second formal notice, the penalty is 80% of the tax.
In addition to the fine, the tax office will charge a rate of 0Interest is calculated at an interest rate of 4%.
Incorrect declarations can also result in penalties and interest.
2 VAT VAT calculation.
Tariff = declared value of goods Product tax rate.
Import VAT = (declared value + first-mile freight + customs duty) tax rate.
Sales VAT = (Final Sales (1 + Tax Rate)) Tax Rate.
Actual VAT paid = VAT imported from sales
Italy. When importing goods into Italy, both individuals and companies face import taxes imposed by customs, including import duty and import value-added tax. Here's how it's calculated:
Import duty
Tariff = declared value of goods Product tax rate.
Import VAT
Import VAT = (declared value + first-mile freight + customs duty) tax rate.
Sales VAT refers to the after-sales tax payable after the sale of goods, which is calculated as follows:
Sales VAT = [Taxable Sales (1+Tax Rate)] Tax Rate.
The actual VAT paid is calculated by subtracting the imported VAT
Actual VAT paid = VAT imported from sales
1. Declaration time.
Quarterly filings. 4 quarterly declarations and 1 annual declaration per year for gross sales of goods less than €700,000 a year or gross sales of services less than €400,000 a year.
Note: In the case of quarterly filings, sellers are required to pay an additional 1% of the tax as interest, to the Italian Tax Authority.
Monthly filings. 12 monthly declarations and 1 annual declaration per year for gross sales of goods exceeding €700,000 per year or gross sales of services exceeding €400,000 per year.
When declaring, sellers have a flexible option to file monthly or quarterly declarations according to the actual situation:
If VAT is calculated on a monthly basis, a monthly return is made and an annual VAT return is filed at the end of the year.
If you file quarterly, you must file a quarterly statement on a quarterly basis.
When sales are quite high, it is mandatory to file on a monthly basis.
2. Deadline for declaration.
First Quarter (January-March): The deadline is May 31 each year.
Q2 (April to June): The deadline is September 16 each year.
Q3 (July-September): The deadline is December 02 each year.
Fourth Quarter (October-December): The deadline is March 16 every other year.
Deadline for annual report: April 30 of each year.
3. Late filing fines.
Submitted within 15 days of the deadline: penalty amount 2778 euros.
Submitted within 90 days of the deadline: Penalty amount 5556 euros.
Submitted within 1 year after the deadline: the amount of the penalty is 6250 euros.
Submitted within 2 years after the deadline: penalty amount 7143 euros.
Submitted after the deadline of 2 years: the amount of the penalty is 8333 euros.
Submit after confirmation of the violation: a fine of 100 euros.
Once you have a local Spanish tax number, you will need to file a return. There are 4 quarterly filings and 1 annual filing per year, in January, April, July and October, which involves reporting sales data for the previous three months.
1. Deadline for declaration.
Quarterly filing period: 20 days for the first to third quarters and 30 days for the last quarter.
Annual filing period: must be completed by January 30 of the following year.
2. Penalties for failure to declare within the time limit.
One month overdue: a fine of 100 euros;
1 month or more overdue: The level of fines gradually increases.
3. Fines for failing to declare on time within the time limit.
Within 3 months: 5% of the tax;
Within 6 months: 10% of the tax;
Within 12 months: 15% of the tax;
More than 12 months: 20% of the tax + late payment fee (the specific late payment fee is subject to the notice of the tax bureau).
Penalty for filing a zero declaration after the filing period (20 days for Q1-Q3 and 30 days for Q4): €150 fine.
Failure to complete the annual declaration on time (failure to complete the annual report by January 30): a fine of 150 euros.
These provisions specify the deadlines for monthly, quarterly and annual VAT filings and the amount of penalties in different overdue cases. It's important for sellers to keep these deadlines in mind to avoid unnecessary fines and issues. Meeting your tax obligations in a timely and accurate manner can help you stay compliant.