Penalty charges to be collected as of 1 April 2015 for improper filing of the EU VAT Recapitulative Statement

Validity
In force until further notice

1 Introduction

This guidance discusses the principles of how penalty charges are imposed on non-filers of the VAT EU Recapitulative Statement.

To file the statement properly is very important from the perspective of intra-Community trading in goods and services and its tax control.

Under the provisions of § 162 e, Value-added tax Act, taxpayers must file the statement every month in order to report their selling of goods and services to businesses in other EU countries. The VAT EU Recapitulative Statement must be filed online, no later than on the 20th of the calendar month immediately following the month of the taxable transaction. If e-filing is not available to you, you can apply for permission to file the statement on paper. When you apply for such a permission you will have to provide a valid reason for it.

If you fail to file the VAT EU Recapitulative Statement or file it incomplete or with errors, the Tax Administration may, under § 168a, Value-added tax Act, impose a penalty sanction for negligence. Minimum amount is €80 and maximum amount is €1,700. (For more information, see the enclosed penalty calculation schedule.)

2 Non-filers

The most serious negligence is to not file the Recapitulative Statement at all. The penalty to be imposed is from €100 to €1,700 if the taxpayer has not filed the statement in spite of having received a reminder message. The amount imposed will depend on the sales volume of goods and services in the European Union, and on whether or not the taxpayer concerned has neglected the filing repeatedly.

Not having filed the Recapitulative Statement during the preceding six calendar months is treated as neglecting it repeatedly.

If the sales volume to be reported on it is below €2,500, no penalty for non-filing is imposed. However, if the taxpayer has failed to file two or more Recapitulative Statements during the preceding six months, the penalty to be imposed amounts to €100.

3 Recapitulative Statement is filed, but with incorrect identity codes

One category of filing problems is that the filer has made mistakes when entering their business partners' identity code information (their VAT numbers).  Mistakes in the country code part of the identity code are frequent, and other mistakes are often found in the string of numbers.  Another frequently occurring mistake is to enter a VAT number that has expired or is otherwise incorrect. If the Tax Administration can correct the mistake, it is not treated as being a reason for imposing a penalty on the filer.

However, if there is a mistake for which the Tax Administration has sent the filer a letter asking them to correct the codes, and the filer has not done so, the amount of the penalty payment is from €100 to €600.  The amount imposed will depend on the seriousness of the mistakes, and on whether or not the taxpayer has neglected the codes repeatedly.

The practice has been to regard EU sales of goods and services reaching at least €2,500 as important, and if the identity codes are wrong, the mistake is regarded as serious. Similarly, if the incorrect identity codes cover more than 10 percent of the sales that are reported on a Recapitulative Statement, the mistake is regarded as serious.

Not having filed during the preceding six calendar months all Recapitulative Statements with correct identity codes, or without corrections — involving mistakes regarded as serious — is treated as neglecting it repeatedly.  Making mistakes with the identity codes is regarded as serious if the aggregate total value (reported on identity codes that are wrong) is at least €2,500 per month.

If we haven't imposed a penalty on the filer because total value did not reach €2,500, we may still impose a 100-euro penalty if one or more Recapitulative Statements within the preceding six months has had identity codes wrong, and the filer has neglected to correct them.

When the exchange-of-information activities between EU countries have revealed that VAT numbers have been wrong and the filer has not corrected them (VAT numbers expired or contain incorrect characters), the penalty on the filer ranges from €200 to €600.  Penalty is collected also in cases where the sales volume of goods and services in the European Union stays below €2,500.   Its amount depends on how frequently the filer has been negligent.

4 Matching problems with Recapitulative Statement and Periodic tax return

The practice of the Tax Administration is to compare the filer's Periodic tax returns with their Recapitulative Statements.  A further check is made when the stage is reached that trading information is being distributed to other EU countries: the validity and accuracy of VAT numbers are verified.

If there is a mistake in the consistency between the filer's Recapitulative Statement and Periodic tax returns for which the Tax Administration has sent the filer a letter asking them to correct the situation and the filer has not done so, the amount of the penalty payment is from €80 to €600.

However, such a penalty is imposed only on filers who have a material inconsistency.  When the matching difference between the values filed on the two report types exceeds 20%, the inconsistency is regarded as a material one.

However, if the matching difference is less than €5,000 and the filer does not repeat the mistake, the Tax Administration will not impose a penalty for the matching problems.

If the filer during the preceding six calendar months has filed Recapitulative Statements that do not match with their Periodic tax returns and there are material differences in the amounts, and the filer has not corrected this, the filer is treated as having neglected their Recapitulative Statements repeatedly.  The threshold where matching problems start being regarded as material differences is €5,000 per month of inconsistencies between Recapitulative Statements and Periodic tax returns.

If we haven't imposed a penalty on the filer because total value did not reach €5,000, we may still impose an 80-euro penalty if one or more Recapitulative Statements within the preceding six months has had inconsistencies and the filer has neglected to correct them.

5 Late filing

If the filer repeatedly submits their Recapitulative Statement late or not until the Tax Administration has prompted them to do so, a penalty payment is imposed.

Filers are treated as having repeatedly filed their Recapitulative Statement late if this has occurred during the previous three months or if they have not submitted it until after the due date indicated on the Tax Administration's reminder letter.

Late filing penalties range from €100 to €300 and are dependent on the quantity of lines on the statement.

6 Filing on paper without permission

If the filer submits their Recapitulative Statement using a paper-printed form without having received permission to do so, the Tax Administration imposes a penalty payment on the filer.  Penalties range from €100 to €300 and are dependent on the quantity of lines on the statement.

7 Multiple types of mistakes

In a situation where the Tax Administration would have reason to impose penalties for multiple mistakes during the same month, and the filer has a history of making mistakes in the past filings over the preceding six months, a penalty for negligence is imposed, ranging from a 300-euro minimum charge to the maximum charge of €1,000.

8 Exceptions from penalty

The Tax Administration may impose a lower penalty charge or refrain from imposing any charge in order to avoid an unreasonable situation. Similarly, the Tax Administration may remove a penalty that has already been imposed if the taxpayer gives an explanation that clarifies the circumstances and reasons why a reporting obligation was neglected or an incomplete Recapitulative Statement was filed.

If an explanation of circumstances provided by the taxpayer or a third party makes it clear that the sale is not an intra-Community supply within the EU, and is e.g. a domestic sale in Finland or a sale to a non-VAT taxpayer in another EU country, the Tax Administration will treat it as a domestic sale and impose no penalty.

No penalties for negligence of the Recapitulative Statements are imposed on businesses that have been removed from the VAT Register, gone bankrupt, or are under a VAT assessment scheme by estimation.

9 Table of penalty charge schedules

Types of negligence

Base amounts affecting penalty size

Charges   

Repeated mistakes in filings

Non-filing

Sales volume

   
 

0 € - 2 499 €

0 €

100 €

 

2 500 € - 14 999 €

300 €

500 €

 

15 000 € - 39 999 €

600 €

900 €

 

40 000 € - 99 999 €

900 €

1 300 €

 

100 000 € -

1 200 €

1 700 €

Identity codes incorrect

Sales volume

   
 

0 € - 2 499 €

0 €

100 €

 

2 500 € -11 999 € (more than 10 %)

200 €

300 €

 

12 000 € -19 999 € (more than 10 %)

300 €

400 €

 

20 000 € - (yli 10 %)

400 €

600 €

Matching problems 

Difference in sales volumes

   
 

0 € - 4 999 €

0 €

80 €

 

5 000 € -10 999 € (more than 20 %)

100 €

200 €

 

11 000 € -19 000 € (more than 20 %)

200 €

300 €

 

20 000 € - (more than 20 %)

400 €

600 €

Late filing

Quantity of lines

   
 

1 -10 lines

0 €

100 €

 

11 lines -

200 €

300 €

Filed on paper without  permission 

Quantity of lines

 

 

 

1 -10 lines

100 €

-

 

11 lines -

300 €

-