VIES declarations

Business means trading, and anyone who in any way wishes to develop his entrepreneurial qualities must first of all be able to be a good trader. With the accession of Bulgaria to the European Union and, accordingly, the common market, the customs requirements for the movement of goods and services between counterparties from the member states have in a way disappeared. Customs declarations gave way to new formalities such as VIES declarations, which reflect trade relations between partners in the Community.

VIES declarations - see more!

When selling products or services to business customers in the European Union, it is important to confirm the VAT number of the counterparties to ensure they are VAT registered. This is because the cross-border sale of goods and services to business customers in the EU is reported via VIES declarations and does not normally require the charging of VAT, unlike a sale to a final consumer.

If such a check is omitted and a discrepancy in the legal requirements for the counterparty is untimely established, the business partner performing the deliveries could commit a violation. This means that it either charges tax when it shouldn't and adds unnecessary costs to its product, or it doesn't charge and collects tax when it should in order to pass it on to the relevant tax authorities.

All data on declared supplies of goods and services carried out between taxable persons established or registered for VAT purposes in a member state of the European Union are contained in the relevant VIES declarations that traders submit. VIES declarations are a mandatory component of intra-EU trade and are submitted as follows:

• VIES declarations for intra-community supplies;
• VIES declarations for supplies as an intermediary in a tripartite operation;
• VIES declarations for supplies of services, the recipient of which is tax; an obligated person established outside the territory of the country;

VIES declarations are an official reporting document to the VAT Information Exchange System (VAT Information Exchange System, abbreviated VIES and from there – VIES declarations). As a result of the submission of relevant VIES declarations in trade transactions, the system helps to detect zero-rated undeclared movements of goods between the Member States.

VIES enables traders to confirm the VAT identification numbers of their customers in other EU Member States before starting transactions. This allows traders to also check the validity of their quoted VAT numbers before mentioning them in VIES declarations. The VIES system only applies to intra-EU trade, with VAT-registered traders required to submit periodic VIES declarations for their EU supplies.

VIES declarations - learn more!

Every VAT-registered person submits VIES declarations for the activity of his business electronically to the National Revenue Agency using the services available with a qualified electronic signature. The deadline for submitting VIES declarations is up to and including the 14th of the month following the tax period to which the VIES declarations relate.

Failure to submit VIES declarations or late submission of VIES declarations is grounds for imposing a fine for natural persons who are not traders, or a pecuniary sanction for legal entities and sole traders in the amount of BGN 500 to 10,000. In addition to the provided administrative sanction, the failure to submit VIES declarations or the submission of VIES declarations with gaps may lead to the non-application of a zero rate of tax for an intra-community delivery or to the storage of goods on demand regime.

In order for the VIES declarations to be accordingly prepared the trader needs to be very well informed about the identification number of his bussines partners. As it became clear, before concluding a transaction and making a delivery to a counterparty from a member state of the European Union, it is mandatory to request the VAT identification number from the trader as well as to make a subsequent check of this VAT number in the information system before reporting it through the VIES declarations.

VIES declarations provide summary information on the deliveries made for the relevant period of time. VIES declarations also declare services performed with a place of performance in the territory of another EU member state. Even if the Bulgarian trader acts as an intermediary in a tripartite operation between traders from different EU member states, he is also obliged to indicate the turnover of these tripartite transactions in its VIES declarations. It is important to note that VIES declarations are submitted only by the companies that make deliveries.

VIES declarations - learn now!

For the accurate filling of VIES declarations, it is, of course, important that traders are familiar with the legislation and in particular with the Value Added Tax Act and the rules for its application. In many cases, the preparation of VIES declarations requires too specific knowledge and skill. This can be difficult, especially for smaller traders who do not have a dedicated in-house department to monitor legal requirements and ensure the correctness of filling out VIES declarations.

In order to avoid penalties due to missed deadlines for submitting VIES declarations or omissions in entering the data in the VIES declarations, many companies delegate this activity to external accounting companies to ensure the orderliness of the VIES declarations. BulAdvice as an accounting company provides a rich portfolio of services to the clients, part of which is expressed in the settlement of VAT formalities such as VIES declarations for international trade within the European Union. The presence of BulAdvice on the Bulgarian and European market for more than 15 years guarantees our clients not just good partnership, but also quality service in every aspect of accounting.

VIES declarations are only a small part of the help that we can offer to our clients for supporting the success of their business, giving them the freedom to focus their efforts in the necessary direction. Each customer of BulAdvice pays only for the services they receive, without binding themselves to package offers that are not of interest to them. If VIES declarations represent a difficulty and risk for your business, we are here to guarantee your peace of mind in the international market.

Subtleties in the preparation and submission of VIES declarations

What are VIES declarations for?

VIES declarations as part of the VIES information system

VIES declarations submission

Guidelines for working with VIES declarations

BulAdvice can help you prepare your VIES declaration