VAT'S IMPORTANT - NEWSLETTER 2023 - 02
NEWSLETTER 2023 - 02
Annual VAT Reconciliation
It is once again time to think about the annual VAT reconciliation. Only then, the financial year can be considered to be complete from a VAT perspective.
WHAT IS REQUIRED IN THE PROCESS?
Usually, an audit by the Federal Tax Administration (FTA) begins with a review of the annual reconciliation. The annual reconciliation includes the following two elements:
Revenue reconciliation: This involves reconciling the final annual financial statements with the VAT declarations submitted - namely, all revenue must be split into:
o taxable sales divided according to the different tax rates
o sales exempt from tax
o exempt sales and
o sales generated abroad.
Input tax reconciliation: The input tax reconciliation should show that the input taxes recorded are the same as those claimed. Furthermore, any input tax corrections should be checked urgently.
BY WHEN MUST THE FINALIZATION BE MADE?
Taxable persons must reconcile their VAT statements with the annual financial statements (so-called finalization).
Companies whose fiscal year ends on December 31, 2022 must correct any differences by August 31, 2023.
An established tax liability must be transferred directly to the FTA account.
An established credit will be refunded by the FTA.
Companies whose fiscal year ends on a different day of the year have the same period of 240 days from the end of the fiscal year to make the finalization.
Provided that no deficiencies are found, it is not necessary to submit a corrective statement.
THE TAXPAYER PERFORMS THE ANNUAL RECONCILIATION ONLY AFTER THE DEADLINE AND FINDS DIFFERENCES - WHAT NOW?
In principle, the FTA assumes that the submitted VAT statements are complete and correct and the tax period is finalized if no correction statement is submitted by the deadline. If the annual reconciliation is carried out at a late stage and differences are detected, a correction must still be made. This correction is then treated as a self-disclosure.
Please let us know if you have any questions.
We will be happy to support you.
Your terraVAT Team
Sabrina Frey Florian Hanslik
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