All VAT registered businesses are required to file periodic VAT returns. These are statutory declarations where all taxable transactions which took place in that period must be reported and any VAT liability or refund is calculated. Each country has a unique filing deadline which usually corresponds to the date that any tax liabilities must be paid. Failure to submit a VAT return on time or late settlement of a VAT liability will result in penalties being imposed.
The format and reporting criteria will differ depending on the country, as will the filing period and deadlines. Most VAT returns are filed on either a monthly or quarterly basis.
In periods where no taxable activity has taken place, a VAT return still needs to be filed (albeit with zero transactions reported). This so-called ‘Nil’ return is still subject to the standard filing deadlines.
A VAT registered business may appoint an agent to prepare and file the VAT returns on its behalf. In some countries this may be a prerequisite, but even in cases where the company can file the return itself, it is recommended that an agent is appointed owing to the language issues and compliance and reporting complexities.