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Be aware of different kinds of data analyses by EU authorities

Are you responsible for trade compliance reporting within your company? Then you should be aware of the fact that authorities within the EU use different sorts of data analyses. While dealing with Intrastat declarations in all EU member states, I noticed many different kinds of data analyses by authorities. In this article I would like to inform you about an analysis that you would not expect, but you definitely should know about.

CROSS-FUNCTIONAL DATA ANALYSES

All statistical authorities are making the analyses you would expect, intra EU purchase and supply reported in the VAT return against the Arrival and Dispatch returns from the Intrastat. This is also the base of the authorities to monitor the threshold to report the Intrastat declarations.

In the last years we have seen a lot of in-depth analyses between the VAT and Intrastat declarations. More about this topic can be found in our previous article ‘Preventing audits by correctly reporting intrastat’.

However, we also notice a different approach by the authorities. Besides the analyses between the VAT and Intrastat declarations they are also taking the import declaration in account. Obviously, the import declaration for customs has a direct link with the value reported in the VAT box for imports. But authorities are also able to apply logic to investigate the “indirect” link they can leverage between Import declarations and Intrastat returns.

A direct correlation between reported field level information common in both returns like HS codes (taric code or customs codes) is an obvious analysis. However, we have also seen questions raised in alignment of data reported over time, in which flow logic is applied as an analysis over multiple reporting data sources. To illustrate, a practical example is provided below.

PRACTICAL EXAMPLE

A company imports € 10 million of products in the Netherlands each year. Often Import declarations are tasks which reside in the supply chain organization with a customs agent or broker. A first check authorities will perform is an alignment against the amount reported for VAT.

However, the more sophisticated analysis apply logic in the other amounts reported in the various declaration data sources available to authorities. e.g. does the sum value reported for Intrastat dispatch align with what is expected given the Imports declared? If the dispatch for Intrastat is only e.g. 2 million, authorities will be keen to learn about the other 8 million. Either they are stored in a warehouse, sold on the local market or exported (although depending on your customs licenses and products carried an export after a customs cleared import may not be logical)? If sold domestically this should be likely from the value reflected in the VAT box on domestic sales. If this isn’t the case, you will likely be audited from a VAT perspective or Customs may want to check the warehouse to validate the stored stock. In these analysis Intrastat information is often leveraged as a verification source to execute a targeted audit for Customs or VAT, as it ultimately is about potential missed revenue.

These analyses require “advanced analytics and applied knowledge” and if your level of process control internally doesn’t allow you to execute these cross functional checks and reconcile data source, perhaps it’s good to discuss if Pincvision can add value to your process.

MORE INFORMATION

In case you are not outsourcing your Intrastat reporting to Pincvision (yet), but like to know what this could mean for your organization? We suggest to read more about our Pincvision Intrastat service. Do you want to speak with one of our experts? Please do not hesitate to contact us by calling +31(0)88-4321800 or send an email to info@pincvision.com

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