EU introduce new procedures for automated control of EU-sales list entry and reporting
Authorities introduce automatic control on the coherence of EU trade
In November 2021, the National Audit Office in their report on VAT controls in EU trade pointed out that action should be taken, after SKAT in a nationwide control had found errors in about 85% of all VAT declarations concerning VAT-exempt EU trade.
Mandatory VAT accounts for cross-border trading within the EU
On January 19, 2023, SKAT announced that automatic control had been introduced between the Danish VAT declaration and the EU's joint system for EU list reporting, for the following fields:
Field A - Purchases from other EU countries
Field B - Sales to other EU countries
This will mean increased control of Danish companies, which will now have to engage in dialogue with both customers and suppliers in other EU countries, in order to adjust their VAT declarations and EU list reports, so that the amounts match.
The fundamental problem of missing or incorrect reporting of purchases and sales in the EU lies in the lack of advice on mandatory VAT accounts, country defined accounts, and the setup of accounting systems for this purpose.
Authorities should have put more effort in to communicating the importance for companies to have one accounting circle for each VAT number they are associated with, including foreign VAT registrations, which are tied to their Danish CVR number.
One of the reasons for multiple accounts is that an invoice must be created when goods are moved, as the one VAT registration sells the goods to the other VAT registration. The creation of multiple accounts is the only correct solution to be able to automate accounting systems to such an extent that they can generate the calculations and extractions required to produce accurate VAT declarations and the associated list reports and EU sales.
The following VAT accounts for cross-border trade are mandatory to have in a Danish VAT account: