VAT tax period

What it means

The VAT tax period is the rhythm in which a payer files the VAT return and pays the tax. The default is the calendar month: the first period starts on the day the person becomes a payer and ends with that month.

The control statement follows the same period, while the EC sales list has a rhythm of its own tied to intra-EU supplies. Changing the period is no formality: it moves both the due date of the tax and the moment a refund arrives.

A person registered only under § 7a is not a VAT payer and has no quarterly option. It files a return only for a calendar month in which it became liable to pay tax, for instance on a service from a foreign supplier, and files nothing for the other months. The control statement does not concern it.

How it works in practice

A move to the quarter is possible only after twelve calendar months have passed since the end of the month in which the person became a payer, and only if turnover for the preceding twelve consecutive months stayed below the limit set by the Act.

The payer notifies the tax office of the change, the office does not make it for them, and exceeding the turnover limit ends the quarterly regime. A return is filed for every period, empty ones included, and VAT payable falls due within 25 days of its end.

The quarterly regime helps a company that pays VAT over: money collected from customers stays in circulation longer. For such a client we plan cash flow so that the money for a whole quarter’s VAT is set aside in advance. Otherwise three months of tax falling due on a single day catches out even an otherwise healthy company.

What to watch out for

An exporter or intra-EU supplier who regularly runs an excess input VAT position and moves to quarterly ties up its own cash: the refund that used to follow a month now waits for the quarter to close before the statutory refund period even starts.

A company exceeds the turnover limit, which ends its quarterly regime, but keeps filing once a quarter. For the months that have passed in the meantime, its returns and control statements are late, and each filing risks a penalty even though the total tax is right.