Future VAT reporting

In the upcoming years, the way taxpayers report their value-added taxes will change. VAT reporting will be improved in order to ensure that the national VAT revenue remains correct.

Because the future reporting system will combat the shadow economy, it will also help maintain a level playing field for the benefit of all businesses. We also aim at simplifying the average VAT taxpayer’s daily operation: the planned reform will not affect their administrative burden.

Redesign of the VAT return

Working together with taxpayers and stakeholders, the Tax Administration has been developing the VAT return form. The plan was to introduce the new VAT return in 2022. However, due to the present circumstances caused by the coronavirus and the economic slowdown, there will be a delay. No decision has yet been made on a new schedule.

The need for an improved information content of VAT returns has arisen because the Tax Administration wishes to obtain a more accurate overall picture of the VAT taxpayer’s taxable business activities. Typically, VAT risks are caused by various exceptional situations in the conduct of business. Unfortunately, the taxpayers’ VAT returns do not provide enough information on the exceptional and special circumstances. Another frequently occurring problem with the existing VAT return forms is that taxpayers do not know how to complete them.

The future VAT return will not only allow the Tax Administration to enhance its control action but also make it easier for VAT taxpayers to receive more tailored, timely guidance from the Tax Administration in matters relating to their VAT taxation.

VAT reporting on an invoice-specific, receipt-specific basis

We have also studied the question whether VAT reporting could be based on every invoice and receipt. If comprehensive VAT information were available on an invoice-specific and receipt-specific basis, the Tax Administration would be able to prepare pre-completed VAT returns for taxpayers. This would be appreciated by small enterprises because it would simplify their VAT filing.

A written account of the Tax Administration’s research and development work in the area of VAT reporting has been presented to the Ministry of Finance for further consideration.