The new Government Regulation No. 333/2021 Sb., which is the implementation of the Regulation (EU) of the European Parliament and of the Council on European business statistics, entered into force on 1 January 2022. With effect from January 2022, the new reporting must include the VAT ID and the country of origin in the direction of the dispatch or, newly, in the direction of the “export of goods”. The reported VAT IDs of the counterparties enable the customs and tax officers to easily compare the Intrastat values with the values in EC Sales List. Extensive changes have also been made in the transaction nature codes reported in Intrastat. Generally, this brings a simplification, e.g. the basic code 12 for a standard delivery remains unchanged, and some codes have been combined into one. The changes have an impact on some of the combined nomenclature codes; some of them cease to exist, some of them change. After a long time, a very large number of codes are subject to a change or lose validity.

Intrastat: Substantial changes from January 2022

• Prior to the Intrastat report submission in January, taxable entities must map whether they have the required information in their accounting and logistics systems and alternatively find out which systems/reports the missing information on VAT ID and the country of origin can be retrieved from.
• From January 2022, taxable entities will provide the Customs and Tax Office with information on what goods (under the combined nomenclature) at what value (invoiced value) in what quantity and to which business partner (according to the VAT ID) the company supplies along with other data required for the Intrastat reporting. Within the Intrastat report, the taxpayer will thus provide information not only for comparison of the data reported by VAT but can also give rise to questions regarding transfer pricing on the part of tax officers if the entity delivers goods to companies within the group. Tax officers will be able to compare the level of prices provided within the group to similar transactions on the market that other taxable entities report in their Intrastat reports. Attention must be paid to the reporting of turnover bonuses and other adjustments exceeding 5%.  
• By reporting the VAT ID of the counterparties, a new possibility arises for customs and tax officers to compare values in Intrastat easily with the values in the EC Sale List reported together with VAT statement, i.e. by individual items according to individual business partners.
• Therefore, it will be necessary for the taxpayer to make regular comparisons between VAT and Intrastat data to be able to explain, on request, not only differences in invoiced value but also time differences in specific transactions.

Intrastat and VAT reports: Systematic and automated preparation

A Deloitte survey among webcast participants shows that 57% of users still prepare their Intrastat reports manually using MS Excel. The new changes that include the reporting of the VAT ID and the country of origin, will require extra work and data completion. In order to process the report, the TaxCube application can be used as a tool for easy preparation and submission of Intrastat reports and VAT control statements. The application simplifies the whole process, verifies VAT and VAT ID codes or, e.g. checks the duplication of documents. This reduces the risk of incorrect reporting and subsequent resulting sanctions.

Remission of sanctions

Let us mention the impacts on the sanction remission in relation to the change in the Intrastat reporting. Intrastat reporting is usually processed by logistics departments within companies or outsourced to a forwarding service supplier. A possible error in the Intrastat report and subsequent imposition of a fine may have a significant impact on the possibility to remit future sanctions. In a simplified way, two fines for the Intrastat reporting caused by an error in the logistics may result in a lower chance to remit sanctions by 50%, e.g. VAT or other taxes.

Breach of taxpayer’s obligations and the effect on remission

Within each application for remission of late payment interest or penalty, the tax administrator assesses whether the following breaches have occurred in recent years:

• As of the day of the decision on the application, the tax administrator registers the taxpayer’s debt from another tax proceedings that is being enforced (it is indicated on the enforcement order).
• In the last three years, the taxpayer has been finally assessed at least twice any tax according to the aids under Section 98 of the Tax Code without the taxpayer’s cooperation regardless of the amount of the tax assessed. For the purposes of this condition, the date on which the decision becomes final shall be decisive.
• In the last three years, the taxpayer has been finally imposed at least two disciplinary penalties under Section 247 of the Tax Code. For the purposes of this condition, the date on which the decision becomes final is decisive.
• In the last three years, the taxpayer has been finally imposed at least two fines for failing to meet a non-financial obligation under Section 247a of the Tax Code. For the purposes of this condition, the date on which the decision becomes final is decisive.
• In the last three years, the taxpayer has been finally imposed at least two fines for late tax statements under Section 250 of the Tax Code. For the purposes of this condition, the date on which the decision becomes final is decisive.

If such breaches occurred, a possible remission would automatically reduce by 50% of the total sanction remitted (it effectively means that the vast majority of cases will not be remitted at all).

Especially the breach in bold is quite frequent in the case of Intrastat reporting. Moreover, in the case of a penalty, it is essential to apply for remission within three months since the payment assessment has become final – there is, in fact, no wiggle room. In the case of late payment interest, the remission can be granted within a period of up to six years, i.e. there are even more reasons to monitor the errors carefully and to prevent them from arising within three years before the decision on the application.

Final recommendation: Gain access to your tax information box

In connection with potential breaches, we recommend obtaining access to the tax platform “MOJE daně”, in case you have not got it yet. The benefits you can experience from having access to the tax information box and the platform itself are substantial in the long run. On the platform, you can track balances on tax accounts of the company (set up notifications of debts) and dispose of them based on other applications (possibility to request a refund of overpayment or transfer to another tax account), submit tax statements, or set up notifications related to key terms and deadlines (deadline for the submission of tax return, deadline for payment, etc.). This is also beneficial from the perspective of deferral. Given the frequency of breaches, you can also easily track on the platform when a fine was imposed on the taxpayer.