EC Sales Lists reconciliations
27/04/23
The Danish Tax Agency has intensified their control efforts with respect to
amounts reported in VAT returns for trade with foreign countries. Figures
reported in boxes A and B of VAT returns by taxpayers will in the future be
automatically checked and compared with the corresponding figures reported
by their EU business partners, in an effort to prevent VAT fraud.
Starting June 2023, the Danish Tax Agency will disclose any such
differences identified, on taxpayers’ e-filing portal (TastSelv).
VAT zero rated intra-EU sales
When sales of goods and/or services performed to companies in other EU
countries are VAT zero rated, it is a requirement that they must be
reported both in box B of VAT returns and in the EC Sales Lists. Sales
must, therefore, be reported in two different places in TastSelv.
The EC Sales List is an intra-EU VAT control system (VIES), which aims to
strengthen the authorities' prevention of VAT fraud in EU trade.
Companies are required to report their EU sales in EC Sales Lists, in order
to confirm if sellers’ and buyers’ reported figures match.
The Tax Agency's checks
The Tax Agency has been criticized for their control efforts in terms of
companies' reporting of VAT zero rated intra-EU sales, which is why this
has been tightened starting this year. This means that the Tax Agency has
started to check for differences between VAT returns and EC Sales Lists.
The Tax Agency's checks cover not only intra-EU sales, but also purchases of
goods and services from other EU countries. In this respect, they check
whether purchases reported in box A of Danish VAT returns match with
corresponding sales reported by their EU business partners in their foreign
VAT returns.
Which numbers must be reported in the different boxes?
Which numbers must be reported in the various boxes of VAT returns can be
found in section 77 of the VAT order.
| Box A1 intra EU acquisitions of goods | The tax base for goods purchased from other EU
|
| Box A2 intra EU acquisitions of services |
The tax base for B2B services purchased from other EU countries, on which 25% Danish reverse charge VAT must be calculated and accounted for. The tax base for services purchased from countries outside the EU must not be reported herein. However, 25% Danish reverse charge import VAT must be reported under “VAT on purchases abroad”. |
| Box B1 intra-EU supplies of goods | The tax base for goods sold to other EU countries other than those reportable in box B2 detailed below. |
| Box B2 other intra EU supplies, including triangulations as buyer-reseller | The tax base for the following sales of goods to other EU countries:
|
Box B3 intra EU supplies of services |
The tax base for B2B services sold to other EU countries, other than e.g.:
|
| Box C other sales | The tax base for goods/services sold without VAT, other than the ones reportable in boxes A1-B3 detailed above, e.g.:
|
Figures reported in boxes B1 and B3 must also be reported in EC Sales Lists,
as the boxes indicate sales to buyers VAT registered in the EU.
EC Sales Lists
Companies that sell goods and services to companies in other EU countries
without Danish VAT must submit EC Sales Lists to the Tax Agency. In these
filings, companies must report the figures per each buyer (per each country)
for each reporting period.
Filings must contain the following information:
- the company's VAT number
- the reporting period
- the buyer's EU VAT number
- the total value of the company's sales of goods excl. VAT per buyer
- the total value of the company's sales of services excl. VAT per buyer,
where the buyer is liable for VAT - the total value of the company's sales of goods part of triangular trade, excl. VAT per buyer, when the company acts as a buyer-reseller
Filings must be submitted monthly as a general rule, no later than the 25th of
the following month, in TastSelv. It is possible to make corrections to
previous filings for up to 3 years after any given reporting period.
Consequences
If the Tax Agency discovers a difference between a company's figures
reported in box B of the VAT returns and the ones in the EC Sales Lists, the
company must be able to explain this difference. The Tax Agency can request
the company to explain the difference retroactively, for transactions not older
than 1 January 2020. If VAT returns include eligible sales not reported in
corresponding EC Sales Lists and the company cannot explain the difference,
the company risks having to pay VAT on those sales, which is calculated as
25% of the tax base.
We therefore recommend putting in place a reconciliation procedure for
internal control in this respect.
Let us help
We are ready for a discussion if you have questions about the various
reporting obligations for trade with foreign countries or if you need our
assistance during check.
