On Mon, Aug 8, 2011 at 5:34 PM, lrspares45
<..hidden..> wrote:
On Mon, 2011-08-08 at 07:59 -0700, Chris Travers wrote:
> Hi;
>
> How many here have to report EU VAT? ÂHow do you track tax rates and
> do your reporting?
Each country has it's own VAT rate, so for the UK I just set the current
rate in taxes, and use the 'start date' for changes. This seems to work
ok.
In my country (The Netherlands), two tax rates apply for goods sold within the country, based on the type of good sold. When delivering intra-EU I have to deliver the services (I'm a services company) free of VAT, stating that the VAT has been deferred to the receiver. I'm assuming this is the same situation as the situation with the goods sold where the receiver submits their VAT number.
Outside the EU, no VAT charges apply to services. I'm affraid I never looked up the case for goods, but I can do so, when further investigating the VAT reporting requirements.
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If sending goods to other EU countries, UK VAT is charged at the usual
rate, unless the customer provides a VAT number, in which case the goods
are supplied VAT-free, but sale has to be recorded on a supplemental VAT
form. This turns up if you put anything other than zero in the 'Supplies
to other EU countries' box, which is for VAT free supplies where a VAT
number has been supplied. I just recorded these by keeping the printed
invoices in a separate file! Purchasing from another country I'm not
sure about, as I never have. You can claim back the VAT paid in the
source country if you have paid it, or you have to pay VAT at your local
rate if you provided a VAT number to be exempted.
Same here, with regard to regulations. I have tried (succesfully) to work my way around intra-EU delivery of goods and services for the time being, so I can't speak from personal experience.
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People get really excited about VAT, but for most businesses it's really
simple. Accounting software tends to present the numbers at the press of
a button at the quarter end (nice, but not essential), but it's simple
to do with LedgerSMB reports anyway.
Unless, of course, you need to report which countries you delivered your goods to at the VAT free "rate".
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Goods being permanently exported out of the EU are VAT free.
As far as The Netherlands is concerned: reporting (and payment!) for very small businesses is on a quarterly basis, but the tax authorities can require monthly reporting and payment if the volume of the payments increases.
The reporting (and payments) are on accrual basis; I'm not aware of a cash-based option.
Although my personal needs would probably be served by a solution like Nigel's, I'd like to warn for the explosion of a chart of accounts, if too many information requirements are encoded into the accounts. I've worked for a company where 2 accounts have been blown up into 64 accounts, simply because they encoded required reporting information into them.
The information encoded into the accounts was derived classification from the customers. As a result, the accountant was forced to redo the derivation regularly, finding differences and creating reclassification postings to keep accurate reporting information.
The solution we put into place was to record the customers the transactions were executed with (posting onto a single account) and running the aggregations on the classifications in a reporting environment.
In the end, the above proved to be much more robust to requirements changes: all the basic information regarding the transaction was available (country of shipment, customer and hence its country, etc), so when additional requirements were put forward, we were able to quickly adapt to these new requirements without restructuring the chart of accounts and doing mass reclass postings.
Nigel, does the above sound like what your perl script for ECSL form submission is doing?
Anyway, these are my thoughts and experience. I'd like to explain that I'm not a bookkeeper or accountant; I'm an information analyst with experience in the finance field who is self employed and therefor needs to keep his own books :-)
Bye,
Erik.