Definition: VAT returns are official documents that businesses are required to submit to their respective tax authorities, detailing the amount of Value Added Tax (VAT) they have charged to their customers and the amount of VAT they have paid on their purchases during a specific period. This document is crucial in determining whether the business owes more VAT to the tax authority or is entitled to a VAT refund. The information provided in the VAT return helps in maintaining transparency and accuracy in financial transactions, thereby ensuring compliance with tax regulations. Source: EIRA team Additional information: VAT returns are official documents or statements that must be submitted to the relevant tax authorities by businesses, usually on a quarterly basis. These returns provide a comprehensive summary of a company's VAT liabilities and credits for a specific period. In essence, they detail the amount of VAT a business has charged to its customers (output VAT), and the amount it has paid on its own purchases (input VAT). The VAT return shows the calculation of the amount of VAT due on sales (output VAT), minus the amount of VAT reclaimable on purchases (input VAT). The resulting figure is the amount of VAT payable to the tax authorities. If the amount reclaimable on purchases is more than the amount due on sales, then the business can claim a VAT refund. The process of preparing and submitting VAT returns requires businesses to maintain accurate and up-to-date records of all their sales and purchases, and to ensure that they apply the correct VAT rates. This can be a complex task, particularly for businesses that trade internationally or deal with a wide range of goods and services, each of which may be subject to different VAT rates. In the context of IT, VAT returns can be prepared and submitted electronically using accounting software or online platforms provided by the tax authorities. This can help to streamline the process and reduce the risk of errors. Additionally, digital record-keeping can make it easier for businesses to monitor their VAT liabilities and credits, and to ensure that they are complying with all relevant regulations and deadlines. In some cases, businesses may be required to submit additional information along with their VAT returns, such as detailed invoices or receipts, or reports on their intra-community supplies of goods and services. This additional information can help the tax authorities to verify the accuracy of the VAT returns and to detect any discrepancies or potential instances of tax evasion. Example: 1. E-commerce Businesses: VAT returns are crucial for e-commerce businesses that sell goods across different European countries. The VAT returns provide information about the amount of VAT charged on their sales and the amount of VAT paid on their purchases. This information is used to calculate the net VAT payable or refundable. 2. Supply Chain Management: In supply chain management, VAT returns are used to track the VAT paid on goods and services purchased and the VAT collected on goods and services sold. This information is essential for calculating the net VAT liability and ensuring compliance with VAT regulations. 3. Financial Reporting: In financial reporting, VAT returns provide important information about a company's VAT liabilities and assets. This information is used to prepare financial statements and assess the company's financial health. 4. Tax Compliance: VAT returns are a key component of tax compliance. They provide information about a company's VAT transactions and are used by tax authorities to ensure that the company is paying the correct amount of VAT. 5. Audit and Assurance: In audit and assurance, VAT returns provide evidence of a company's VAT transactions. Auditors use this information to verify the accuracy of the company's VAT records and assess the company's compliance with VAT regulations. 6. Business Planning: In business planning, VAT returns provide information about a company's VAT costs and revenues. This information is used to forecast future VAT liabilities and assets, and to make decisions about pricing, budgeting, and investment. 7. Cross-Border Transactions: For businesses involved in cross-border transactions within Europe, VAT returns provide information about the VAT charged in different countries. This information is used to calculate the net VAT payable or refundable in each country, and to ensure compliance with the VAT regulations of each country. LOST view: OV-Information Base Identifier: http://data.europa.eu/dr8/egovera/VATReturnsBusinessObject EIRA traceability: eira:InformationBusinessObject ABB name: egovera:VATReturnsBusinessObject EIRA concept: eira:ArchitectureBuildingBlock Last modification: 2023-07-27 dct:identifier: http://data.europa.eu/dr8/egovera/VATReturnsBusinessObject dct:title: VAT returns Information