🇪🇺 Corrections (correction reports)

General information

If VAT returns have been filed with inaccurate VAT liability due to incomplete or incorrect data, corrections —referred to as correction returns— can be made.

Prior to proceeding with correction returns, it's advisable to engage in a discussion with your tax advisor to evaluate the feasibility and rationale of submitting corrections from both a tax and business management perspective.

Procedure for making adjustments

For the majority of EU countries where Taxdoo provides tax representation,  corrections for periods that have already passed their deadline must be  submitted as a separate correction return. I The following countries are exceptions to the aforementioned rule:

In Italy and Austria, corrections for past years are made via the annual return, so no individual correction of all periods is required.

In Great Britain, corrections are only required if the tax liability deviates by more than GBP 10,000. In this case, the adjustment is made with the next VAT return.

In Spain, corrections are only required in special circumstances (such as imminent deregistration). If this is the case, the adjustment will be made with the next VAT return.

Handling Credit Balances 

The process of handling credit balances resulting from corrections varies across different EU countries:

In France and Poland, following the correction return,  an application to determine the overpayment must be submitted to the Tax office.. The tax office then conducts an individual case assessment. Upon approval, refunds can be made through bank transfers (in FR & PL) or set off against future VAT liabilities (in PL only).

In the Czech Republic, following the correction return, the refund is automatically made to the bank account deposited.

In Spain, credit balances are set off against future VAT liabilities . In exceptional cases, an application for reimbursement can be made, but this usually involves more extensive checks and is therefore not recommended by us.

In Italy, initiating a credit balance refund requires the establishment of a formal procedure.Furthermore, this is only possible if the credit has already been determined by the tax office within the framework of the annual return.

In Great Britain, credit balances are transferred upon request. It is possible that the tax offices also proactively send a cheque to the tax debtor, even if no application has been made.

For other countries offered by Taxdoo as part of the Compliance Packages (e.g. Sweden, the Netherlands or Denmark), we do not yet have any empirical values.