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EU member state penalties for late VAT returns and/or non-payment:


Quick link to a specific EU member state:

  1. Austria

  2. Belgium

  3. Bulgaria

  4. Croatia

  5. Cyprus

  6. Czech Republic

  7. Denmark

  8. Estonia

  9. Finland

  10. France

  11. Germany

  12. Greece

  13. Hungary

  14. Ireland

  15. Italy

  16. Latvia

  17. Lithuania

  18. Luxembourg

  19. Malta

  20. Netherlands

  21. Poland

  22. Portugal

  23. Romania

  24. Slovakia

  25. Slovenia

  26. Spain

  27. Sweden

  28. United Kingdom


Source: KPMG’s VAT essentials guide, except for details on Greece which relies on the Greek Law Digest.

 

Austria

Late VAT returns penalties may be levied up to 10% of the tax due. Failure to settle any outstanding VAT payments on time may result in late payment penalty of 2% of the net tax payable. Under certain circumstances criminal charges may be levied.

Penalties may become due for failing to register for VAT promptly, even if it is unlikely from a practical point of view. If the deliberate failure to register for VAT is not connected with a late payment of VAT, the penalty is limited with €3,625; otherwise it may be considered as a criminal offense.


Non-payment/late returns

A late payment penalty of 2% of the net tax payable is levied.

In addition, a late filing penalty of 10% can be levied, VAT returns are not filed in time because of a late registration.

Belgium

Failure to file VAT returns on time and settle any outstanding payments may result in penalties and interest. The penalty that is imposed for late filing of VAT returns equals €25 per month (if no VAT is payable for the respective declaration period) or €50 per month (if VAT is payable for the respective declaration period). Non-filing of VAT returns may result in a fine of €500 per VAT return.


Non-payment/late returns

Late payment interest of 0.8% per month is imposed for late payment of an amount of VAT due.

A penalty of €500 can also be imposed for failing to file the VAT registration application. This penalty can be reduced to €250.

For non-payment of VAT, or fraud, 200% of the VAT due is the penalty.

If a business makes an error on a VAT return, understating liability, a penalty up to 20% of the VAT not declared may apply. If you make an error on a VAT return, which overstates your entitlement to a VAT credit, a penalty of 10% of the VAT incorrectly claimed may apply.

Bulgaria

Penalties are monetary sanctions and interest on unpaid VAT. Penalty interest is determined on the basis of the basic interest rate announced by the Bulgarian National Bank, increased by 10%. The penalty interest rate for the last couple of years was approximately 10.2%

Croatia

A taxpayer who does not comply with Croatian VAT law may be subject to a fine of up to HRK 500,000 (approximately €66,000) depending on the type of offence. In addition, the responsible person of the entity may be penalised HRK 50,000 (approximately €6,600). There is also a penalty interest of 12% per year on the late payment of a VAT liability.

Cyprus

Where the VAT authorities identify a mistake, a flat monetary penalty equal to 10% of the VAT amount due is imposed. In addition, annual interest equal to 5% is also imposed and is calculated on the total amount of the VAT due plus the 10% flat penalty.


Non-payment/late returns

The penalty for late registration amounts to €85 for every month of the duration of the failure.

Czech Republic

Maximum amount of the penalty of late declaration of tax is CZK 300,000 (€11,000).

If the tax return is not filed or is filed with a delay and such delay is longer than five working days, the penalty for late declaration of tax is assessed as follows:

  • 0.05 percent of VAT liability for each day of delay; up to 5% of VAT liability

  • 0.05 percent of VAT credit for each day of delay, up to 5% of VAT credit

Denmark

Fines are approximately twice the amount of VAT unpaid without any upper capping limit.

Businesses can receive a fine for late registration; however, in many cases the tax authorities do not claim late registration fines. Only in case of abuse or unwillingness to register and pay Danish VAT are penalties charged.

Estonia

Where the tax authorities discover an error the tax authorities are entitled to charge a penalty of up to €13,000 and interest of 0.06% per day is also charged.

Tax evasion on a large scale can result in three years in jail or five if the amount owed is more than €320,000. Tax fraud is punishable by five years in jail or seven if the amount defrauded is more than €320,000.


Non-payment/late returns

The penalty for failing to register for VAT promptly may be up to €3,200.

Failure to furnish VAT returns on time may result in a penalty of up to €13,000.


Finland

Penalties are raised if a business has paid less tax than was due or has neglected its obligation to submit periodic tax returns. The amount of the penalty varies depending on how frequently the business failed to pay, the length of the delay of non-payment/under-payment of VAT or the delay in submitting the periodic tax returns.

France

Insufficiency of declaration, default or late filing of VAT returns, default of payment or no payment of the VAT, undisclosed activity, non-declaration of reverse charge, mislabeled invoices are subject to penalties representation a percentage of the the related VAT and interest for late payments. Legal and criminal penalties could also apply in case of missing/wrong invoices.


Non-payment/late returns

Non-registration or late registration, where it is mandatory, may be subject to the following penalties:

  • 0.4% interest rate per month (4.8% per year) on the VAT arrears.

  • surcharge of 10% of the VAT arrears and 80% in case of fraud (undisclosed activity).

  • The statute of limitation for the tax authorities in France is three years.

A specific extended statute of limitation exists in the absence of registration revealing a hidden activity or permanent establishment.

Germany

If your business does not pay an amount of VAT declared on an invoice, this infringement can be punished with a penalty of up to €50,000 (careless tax evasion). Professional or criminal evasion of VAT revenues can be punished by a fine or with imprisonment.


Non-payment/late returns

Failure to submit a VAT return on time may result in a late-filing penalty, which is at the discretion of the tax authorities. The penalty for late filing can be up to 10% of the net VAT liability due for the VAT return period, but not more than €25,000.

Failure to make a VAT payment on time may result in a late-payment penalty. The penalty is 1% of the outstanding VAT payment, multiplied by the number of months that the payment is overdue.


Greece

The interest provided by law in case of late filing, inaccurate filing or non-filing of a VAT return is 1.5% (maximum 60%), 3% and 3.5% (maximum 120%) per month respectively, calculated on the amount of VAT that was not paid to the State. In case of administrative or court settlement the above extra tax is reduced to 3/5. Moreover, serious criminal penalties are provided by law in case of VAT evasion.

Hungary

Four basic penalty types:

  • Default penalty for mistakes in the reporting or invoicing up to HUF 500,000 (approximately €1,650)

  • Tax penalty for tax shortage up to 50% of the tax shortage (in certain cases up to 20% or 200%)

  • Late payment penalty in the amount of the double of the interest rate of the National Bank of Hungary

  • Self-revision penalty up to 50% of the late interest penalty.

Ireland

Penalties can consist of either fixed fines or tax-geared penalties or both. Penalties are recoverable by way of civil proceedings and in certain circumstances penalties will be prosecuted through the criminal courts. Interest will normally be applied to any underpayment of tax.


Non-payment/late returns

Failure to register for VAT promptly may result in a penalty of €4,000. Any unpaid VAT liability in the period may be subject to penalties of up to 100% of the tax due together with interest of 0.0274% per day with effect from 1 July 2009.

Italy

The VAT penalty regime can be categorized on the basis of the type of the violation committed by the taxpayer. Penalties may be increased by 50% if the taxpayer committed similar violations, already assessed, in the preceding three years.

In addition to pecuniary penalties, there are also ancillary penalties such as the suspension of the trading license.


Non-payment/late returns

The penalty for failing to register for VAT on time is between €516 to €2,066.

Failure to file VAT returns and settle any outstanding payments on time may result in penalties. Penalties are up to 240% of the outstanding amount of VAT.

Latvia

Where an error is discovered by the tax authorities they can impose a penalty of 20% or 30% of the unpaid tax, together with late payment. If however, the company voluntarily discloses the error to the tax authorities the penalty may be mitigated or waived altogether. Late payment cannot exceed the unpaid (primary) tax.

Non-payment/late returns

For late payment, a penalty of 0.05% per day is calculated.

Penalties for non-compliance are not yet determined.

Lithuania

Where the tax authorities discover an error, a penalty between 10% to 50% of the VAT due is charged. Interest is charged for late VAT payment as well. Currently (as at the third quarter of 2012), the late payment interest rate is 0.03 percent per day.

In addition, a penalty of between 10% to 50% of the unpaid VAT plus late payment interest may be due.


Non-payment/late returns

Failure to submit VAT returns on time may result in an administrative penalty amounting from LTL 200 (appr. €58) to LTL 500 (appr. €145). The late payment of VAT attracts a late payment interest of 0.03% (as applicable at third quarter 2012) per day on VAT due.

Note: late payment interest rate is confirmed by the decree of Government each quarter, therefore it can change.

Luxembourg

Failures in relation to compliance obligations (such as, filing of VAT returns, issuing of invoices, keeping records, paying VAT, proper bookkeeping, registration, provision of information to the tax authorities, etc.) may result in a penalty of between €50 to €5,000 per infringement.

In cases of fraudulent activity, notwithstanding penal sanctions, a fine which could amount to 10% of the tax eluded could be applied.


Non-payment/late returns

In addition, late payment - or failure to pay VAT due - may be subject to a VAT fine for late payment that may not exceed 10% per year of the tax due.

Malta

If a business makes an error on a VAT return which understates the liability or overstates the entitlement to a VAT credit, a misdeclaration penalty of 20% of the error may apply. If, however, it voluntarily discloses the error, the penalty will be reduced to 10%. Interest would apply to an error unless there is no overall loss of revenue.


Non-payment/late returns

Failure to furnish VAT returns and settle any outstanding VAT payments on time may result in additional tax and interest. For example, one late VAT return and VAT payment will give rise to a 1.75% monthly penalty of the tax due. To mitigate additional tax, a business must show a reasonable excuse for the default.


Netherlands

When the taxpayer does not file the return on time or does not make a payment on time, the tax authorities impose a fine. The amount of the fine depends on the number of times the taxpayer is late to file the tax return and/or to make a payment.


Non-payment/late returns

Failure to submit VAT returns and settle any outstanding VAT payments on time may result in a penalty. For not making the payment in time, the penalty may be up to a maximum of €4,920.

Poland

Where the tax authorities discover an error, a penalty interest (currently 10.5%, annually) is charged on the amount of the underpaid VAT liability or overstated refund of VAT. This penalty is charged from the date the tax should have been paid, or a refund was unduly granted. Moreover, the individuals responsible for the company tax settlements may be held responsible for the activities of the company on the basis of the Penal Fiscal Code.


Non-payment/late returns

There are no specific penalties for late registration. However, if late registration leads to underpayment of VAT, the Polish tax authorities may impose a penalty up to approx. PLN 15.36M (approx. €3.7m) - depending on the value of underpayment. In addition, where a business fails to register on time, it must account for VAT on all taxable transactions during the period it was required to be registered.

Portugal

Penalties are usually confined to lump-sum penalties that are fixed dependent on the type of taxpayer and offence involved.

If the taxpayer makes an error on a VAT return that understates liability or overstates entitlement to a VAT credit, a penalty of up to 100% of the error may apply. If, however, it voluntarily discloses the error to the tax authorities, the penalty can be mitigated. Interest would normally apply to an error.


Non-payment/late returns

There is a penalty of €600 on the act of retroactive registration.

Failure to furnish VAT returns and settle any outstanding VAT payments on time may result in a penalty ranging between 30% and 100% of the VAT in default with a maximum of €45,000. In addition, penalty interest is charged at 4% per year.

Romania

Penalties and interest apply for late payment or underpayment of VAT liabilities. Fines apply in case of failure to register for VAT purposes and for failure to file VAT returns within the legal deadline.

Non-payment/late returns

The fine for not registering or late registration for VAT purposes ranges from RON 1,000 to RON 5,000 (that is approximately €220 to €1,100).

Slovakia

Failure to register or late VAT registration, late or underpayment of VAT, late filing of VAT returns or late payment of VAT.


Non-payment/late returns

Failure to register for VAT purposes may result in a penalty of up to €20,000.

A penalty for failing to submit the VAT return on time amounts to a minimum of €30 and a maximum of €16,000.

If VAT return is not filed even after formal request of the tax authorities, a penalty of up to €32,000 may be imposed. A minimum penalty is €60.

Slovenia

Individuals who commit an offense in connection with the independent performance of activities shall be subject to a monetary penalty. Legal persons shall be subject to a monetary penalty for violations if they:

  • Fail to charge and levy VAT when the liability arises

  • Fail to charge and levy VAT on the correct taxable amount

  • Fail to state the prescribed information on an invoice

  • Incorrectly calculate the amount of input VAT

  • Fail to submit a VAT settlement or fail to submit it within the prescribed time limit

  • Fail to report to the tax authority when activity begins, changes, or ceases, etc.


Non-payment/late returns

Failure to report to the tax authority when activity begins, changes, or ceases, or failure to submit an application for registration within the prescribed time limit may result in the imposition of a fine ranging from €2,000 to €125,000 depending on the type of offense.


Spain

The general penalty for failing to pay the VAT due amounts to 50% of the unpaid VAT. However, this percentage can be increased depending on certain criteria such as the repetition of infractions or hiding of relevant information up to 150%.

VAT taxpayers who fail to pay the VAT due are obliged to pay interest accrued from the last day of the voluntary payment date until the day in which the payment is effectively made. Delay interest rates vary each year, (5% for tax year 2012). Delay interest only applies to the unpaid VAT due and not to penalties.


Non-payment/late returns

The late payment of VAT on a voluntary basis without any prior requirement from the Spanish tax authorities would imply a surcharge of 5% (if payment is made within three months from the due date), 10% (if paid within three to six months), 15% (if paid within six to 12 months) and 20% (if paid after 12 months) along with delay interest. Despite this, such surcharges will be reduced a 25% in case the VAT taxpayers pay them totally within the legal deadline established by the Spanish Law.

A penalty of €400 for failing to register for VAT promptly will be imposed. Please note that this penalty would be imposed for not registering. Note that the late submission of a Spanish registration form will reduce the above mentioned penalty to €200.

Sweden

There are a number of penalties that apply in Sweden for compliance failures. Late VAT return penalties have already been addressed above.

If a business makes an error on a VAT return which understates its liability or overstates its entitlement to a VAT credit, it may incur a surcharge of 20% of the amount of tax that is assessed over and above the amount reported.

United Kingdom

There is a failure to notify penalty where the business exceeds the VAT registration limit and fails to inform the tax authorities within 30 days. The penalty is a percentage of the VAT due as a result of the failure. The percentage depends a number of factors including the reason for the failure to notify and the how the failure was disclosed.


Non-payment/late returns

Failure to furnish VAT returns and settle any outstanding VAT payments on time may result in a default surcharge. For example, two late VAT payments or VAT returns in a 12-month period will give rise to a 2% penalty of the tax due on the second return. The penalty increases firstly to five percent, then to 10% up to a maximum 15% for each further late return or payment. A business will remain within the default surcharge regime until there has been a 12-month period free of defaults. To mitigate default surcharges a business must show a reasonable excuse for the default.

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