Saying “goodbye” to the calendar year does not mean the end of responsibilities for indirect tax experts. In Europe, the end of the fiscal year brings with it complex reconciliation obligations which, if poorly managed, can expose your company to costly adjustments.
Here are the three pillars to keep an eye on to end the year with peace of mind.
1. Annual returns and summaries (CA12 and equivalents)
In addition to monthly or quarterly filings, many countries (such as France and Belgium) require an annual summary declaration. This is the crucial moment to:
- Finalize your tax position.
- Adjust VAT credits or debits.
- Ensure that your accounting records are fully consistent with your declarations.
2. Capital Goods Scheme
This is often the most complex issue. For your fixed assets, the rules require annual monitoring of the initial VAT deduction. If the use of the asset (taxable vs. exempt) changes during its lifetime (5 to 20 years depending on the asset), an annual adjustment of the VAT deducted is mandatory.
Obllik tip: : Automating the tracking of these assets has become essential to avoid human calculation errors.
3. Statistical reporting and reconciliations (Intrastat/DEB)
Even if intra-Community flows are reported regularly, some jurisdictions require annual summary reports. A discrepancy between your financial statements and your statistical reports is often the first “red flag” that triggers a tax audit.
What are the risks of poor preparation?
Neglecting these steps exposes you to:
- Significant financial penalties.
- Interest on late payments.
- Loss of unclaimed VAT credits.
- Unnecessary stress during future tax audits.
Anticipate to manage better
Your strategy for the coming year must include a precise European tax calendar and constant monitoring, particularly in light of initiatives such as ViDA (VAT in the Digital Age), which will radically transform our tax landscape.
Is your team ready to navigate these complexities, or do you need temporary expert support to secure your closing?