Companies exporting to other companies in the EU can do so at a zero-rate VAT provided they can prove that the goods have been sold to a VAT-registered company in another EU country. This is done by reporting the VAT numbers of the individual companies that they have been trading with along with the total value of goods that have been sold this company. For most companies the VIES statement is completed every quarter, but if requested by the company itself, the information can be delivered every month. Some small traders can file the information annually. The regulation related to this requirement is implemented by the Office of the Revenue Commissioner. From 1st January 2010 VIES goods returns will be mandatory each month for traders returning over €100,000 per quarter and from 1st January 2012 it will be mandatory for traders returning €50,000 per quarter. As regards Member States „ option on the frequency of returns regarding services, Forfás has been informed that Ireland will opt for the minimum frequency allowed thereby keeping the administrative burden as light as possible.
Administrative activities in companies
Businesses who need to report VIES typically keep a record of who they have been trading with and how much trade they have had with the individual company during the quarter covered by the VIES. This is done by clerical staff either in an IT-system, or in a separate spreadsheet. The necessary information will appear on the invoice that is issued to the company the goods have been exported to.
Hence, while the value of the goods sold to that company will be recorded as part of the normal work associated with making an invoice, the VAT number of the company that the goods are sold to is only recorded in order for it to be reported at the end of the quarter when filing the VIES form. The work it is quite straightforward, but businesses generally have to spend some time identifying the correct VAT number for the company that the goods are sold to, as the information has sometimes not been correctly picked-up, when the order was
53Please note that there may be discrepancies in the total administrative costs figure for all filings. This is due to the rounding that has been applied in this text on the per registration/filing figure.
initially placed. This will involve contacting the company and retrieving the correct VAT number.
In theory the amount of work will depend on the number of different VAT numbers the company has been trading with. However, the interviewed companies have reported quite consistent figures on time consumption. Hence, companies who report many VAT numbers per VIES filing will typically have better mechanisms for ensuring, that the right VAT number is picked initially, when an order is placed.
Reporting can be done either manually by entering the individual VAT numbers into the VAT form or creating a file from the IT-system with the relevant information and uploading this electronically to Revenue. Therefore, reporting the data also takes roughly the same amount of time, as businesses with few VAT numbers to report will do so by manually, while
businesses with many VAT numbers will find it more cost effective to upload a file.
The typical company will spend around 4 hours per quarterly filing. It will involve the following administrative activities:
Information retrieval (10% of time); Calculation (10% of time);
Presentation of figures (10% of time); Checking (50% of time);
Correction (10% of time); and,
Reporting/submitting information (10% of time).
Number of iterations
It has not been possible to obtain figures on the number of VIES statements filed annually by the four sectors54, but using the figures and assumptions applied in the earlier section on VAT forms with information on exports, the total number of businesses which report VIES can be estimated to total 1,505. It is assumed that all of these companies report VIES every quarter. This breaks down as follows:
54 Revenue has informed us that the number of VIES registered traders fluctuates around 9,500 in any year.
Table A11: Annual number of VIES statements lodged
Businesses exporting to the EU
Annual number of VIES statements lodged NACE 15: Manufacture of food products and beverages 1,056 4,224
NACE 24.1: Manufacture of Basic chemicals 86 344
NACE 24.4: Manufacture of pharmaceuticals, medicinal
chemicals and botanical products 154 616
NACE 30: Manufacture of Office Machinery & computers 209 836
Administrative costs
The total administrative costs of reporting VIES are as follows:
Per quarterly filing €97.65
Total annual costs for all filings €587,84355
75 per cent of these costs are due to EU regulation. The remaining 25 per cent are the costs of reporting the fields that are included in the form as integrity checks by the Irish
authorities.
The number of filings is a cost driver for this requirement, and since the total number of filings has been arrived at based on certain assumptions, it is relevant to see how the administrative costs will differ under different scenarios:
If all businesses within the four sectors report VIES information, a total of 2,475 businesses will report VIES every quarter. In this case, the total administrative costs will be €966,718, i.e. a 64 per cent increase in administrative costs compared to costs that have been assessed.
If only 50 per cent of all businesses within the four sectors report VIES information, a total of 1,238 businesses will report VIES every quarter. In this case, the total
administrative costs will be €483,555, i.e. an 18 per cent decrease in administrative costs compared to costs that have been assessed.