Increased importance of timely VAT returns

Extended limitation/control periods

Since January 1, 2023, the limitation period for VAT in the case of late filing has been extended from three to four years. This means that the tax authorities have four years instead of three to audit the return and impose any penalties.

The extended limitation period only applies to the return period for which the return was filed late. This means that if the return for the first quarter of 2024 was filed on time but the return for the second quarter of 2024 was filed late, only the limitation period for the second quarter of 2024 will be extended from three to four years.

Penalties

Late submission of VAT returns generally results in non-deductible fiscal penalties for the VAT taxpayer. These penalties amount to 100 euros per return and per month of delay, with a maximum of 1,000 euros.

Currently, there is an administrative tolerance in place. This limited tolerance means that no penalty is imposed if the return is submitted by the 10th day of the month following the month in which the initial filing deadline expired. For example, based on this tolerance, no penalty is imposed if the return for the first quarter is submitted by May 10. However, as of January 1, 2025, this tolerance will be completely abolished, and late submission of the return will therefore be immediately penalized.

Late payment interest

Late payment of the balance due from the VAT return will also result in late payment interest being due. For the calendar year 2024, these interest rates amount to 8% per annum. Interest is calculated monthly, and a month commenced will be counted as a full month.

Conclusion

In conclusion, timely submission of the VAT return is an absolute necessity. This avoids unnecessary penalties, late payment interest, or an extension of the limitation period. We advise submitting any late returns as soon as possible and paying the VAT due to avoid additional penalties and late payment interest.

Please note that from 1 January 2025, the submission deadline for quarterly filers will be extended to the 25th of the month following the end of the quarter. However, the payment deadline remains unchanged.