How to make the payment of VAT during Customs Clearance?

Taking responsibility for settling the customs clearance stages yourself is a rather painful task.It is preferable to hire an intermediary who is responsible for facilitating the procedures: the carrier can take charge of the execution of the customs clearance procedure.

Within the European Union: Acquisitions and Deliveries

For all operations that take place within the European Union, we speak of intra-community VAT, acquisitions and deliveries.

Understanding VAT – intra-community VAT

The Mini Guide to understand and know everything about VAT – Within the European Union: acquisitions and deliveries

So what does intra-community VAT mean?

In order to avoid the accumulation of taxes, the VAT system is harmonized at the level of the European Union. The deliveries and acquisitions of intra-community goods and services are subject to 2 simple principles:

Acquisitions (purchases) of goods from another Member State are taxable in the Member State of arrival (at the rate and conditions of the country of arrival). The s corp tax calculator is important in this case.

Example: if you buy goods from a taxable Italian supplier, and you have these goods delivered to France:

  • The invoice from your supplier does not mention VAT.
  • In principle: you must pay VAT in France.
  • This VAT is deductible if the mandatory information is found on the invoices.

The 9-point VAT mini Guide for Business Creators

The Mini Guide to understand and know everything about VAT – Deliveries (sales) of goods to taxable companies in another Member State. Deliveries (sales) of goods to companies subject to tax in another Member State are exempt from VAT in the Member State of departure (provided you comply with the mandatory information on your invoices).

Example: if you sell goods to a customer in Germany, you benefit from a VAT exemption in France.

To be able to apply these principles during your intra-community trade, you must meet certain conditions:

Apply for an intra-community VAT number (the Tax Identification Number) from the Directorate General of Taxes.

Complete a DEB (Declaration of Exchange of Goods): this is a monthly declaration that must be produced within 10 days of the month in which the VAT is due.

Fines and Penalties

In the case of intra-community trade, certain information is required on invoices.

Two Major Recommendations

1. Save your Payment and other Evidence

Despite the fact that HMRC says that you don’t have to save receipts for PAYE purposes you actually need to show that you are working the principles accurately so our recommendation is to ensure you have narrative proof to show why you applied the standards as you did.

The best costs frameworks will permit you to spare a picture of a receipt so you don’t have to have cumbersome and wasteful recording frameworks as you can do it all in the cloud.

2. Make sure you have a Clear and Well thought out Policy

This is essential for each all around run organization.

Having a costs strategy is an absolute necessity as it will tell workers what they can and can’t guarantee. It will likewise detail limits for things, for example, lodgings and resource.

Ensure however that it is in clear and simple to understand language. Steer away from utilizing any language that you may have gathered from the HMRC site and it is a smart thought to incorporate genuine guides to delineate your focuses.

Also, obviously, you should ensure that your strategy doesn’t struggle with any VAT or PAYE rules around installments to workers.

Good to know: during an acquisition, it is important to check the authenticity of the intra-community VAT number of your business partner.If the number is incorrect, you will be required to pay VAT on the transaction concerned.For more details on intra-community VAT, see our article: Intra-community VAT Top 8 frequently asked questions.

VAT, how is it declared?

Establishing a VAT return is not an easy task for entrepreneurs. You must be well informed about the different applicable regimes.