Risks of indirect tax
Many organizations are unaware of the penalties which can be imposed when they fail to meet the compliance obligations stipulated in the EU VAT Directive (including the local variances in VAT legislation).
As a result, they are unaware of the indirect tax risks!
EU Penalties on Reverse-charge
To illustrate the consequences of not being “In control”, find below some of the reverse charge penalties various EU Member States apply. Severe penalties can be imposed regarding VAT transactions.
More business-to-business transactions will become subject to reverse charge because of the VAT Package which came into effect January 1, 2010. Therefore the reverse charge penalty regime is highlighted.
In France, a 5% penalty applies to taxable businesses who failed to reverse-charge French VAT on the VAT return (art. 1788 A of the French tax code), even when they have the right to deduct this VAT. In Bulgari applies the same penalty regime as in France. In Romania, a 2% penalty applies, whilst a fine of 20% can be applicable in Belgium. In Italy, the failure to record transactions subject to VAT (including EU-acquisitions) can be penalized ranging from 100 to 200 % of relevant VAT. Failure to record transactions that are VAT exempt or non-taxable can be penalized ranges from 5% to 10 % of the amount failed to record.
A VAT penalty can easily evaporate any profit. Especially in competitive industries, where the margins are thin.
Make sure that you will not be confronted with unpleasant sursprises. Contact Pincvision. The only company for which compliance is core business!
