You have not fulfilled your VAT obligations in time in a state of the European Union, even though your company is liable for VAT in that country? The administration is likely to apply penalties to you. Check the risks involved and the late payment interest applied in the different countries of the European Union, and make sure you don’t miss a deadline.
Overview of the applicable sanctions in the 27 countries of the European Union
Fines, penalties and interest for late payment are not the same within the European Union. Thus, each country of the European Union applies different penalties depending on the infringement and their own legislation.
Summary of fines, penalties and interest on arrears applicable in the European Union (EU) in 2022:
|Country||No VAT identification||Non-filing of the VAT return||Errors on the VAT declaration||Failure of VAT payment|
|Austria||None||A fine of 10% of the VAT due. The fine is not applied when the amount of VAT due is less than 50 euros.||A fine of 2% of the VAT due.||Late payment interest of 2% of the VAT due. Interest on late payment is not applied when the VAT due is less than 50 euros.|
|Belgium||A fine of 100 euros per month of delay capped at 500 euros.||Une amende de 100 euros par déclaration et par mois de retard.||Correction spontanée : pas de pénalités Correction suite à un contrôle fiscal : amende de 5% à 20% de la TVA due||Interest on arrears of 0.8% per month of delay. A penalty of 15% of the VAT due if a formal notice has been served.|
|Bulgaria||A fine of BGN 500 to BGN 5000 (about 255 to 2556 euros).||A fine of between BGN 500 and 10,000 (between 256 euros and 5,113 euros) per declaration.||None||A penalty of 10% more than the standard late payment interest in Bulgaria applied to the VAT due|
|Croatia||Aucune||A fine of between 2,000 and 500,000 HRK (approximately 264 to 66,149 euros) for not filing the declaration or for not declaring all the required information.||A fine of between 2,000 and 500,000 HRK (approximately 264 to 66,149 euros). Interest on arrears of 5.75% per year may be charged.||Fine of varying amount between 2000 and 500,000 HRK (between 264 and 66,149 euros approximately) for non-payment of VAT, or late payment. Interest on arrears of 5.75% per year may be charged.|
|Cyprus||Late registration: 85 euros per month of delay Late registration of VAT number: 85 euros per month of delay.||A fine of 100 euros per declaration.||A penalty of 10% of the undeclared VAT due and 1.75% per year of the undeclared VAT due and the above mentioned penalty.||10% of the VAT due and 1.75% of the VAT due per year.|
|Czech Republic||A fine of up to 20% of the VAT due upon registration. Late payment interest of up to 16%.||A fine of up to 300,000 CZK. The fine is a maximum of 5% of the VAT due. 0.05% daily interest is added.||A fine of up to 20% of the undeclared VAT||8% interest per year and 3.75% bank interest.|
|Denmark||None||A fine of 800 DKK (about 107 euros) per declaration.||A fine of 800 DKK (about 107 euros) per declaration.||0.7% per month of delay. The penalty is calculated on a daily basis (pro rata temporis. A penalty of 65 DKK (about 9 euros) per reminder from the administration. The administration may, at its discretion, apply an additional penalty of at least DKK 1,000 (approximately 134 euros) depending on the seriousness of the offence or its repetition.|
|Estonia||Une amende pouvant aller jusqu’à 3200 euros.||Une amende pouvant aller jusqu’à 32.000 euros si l’infraction est commise intentionnellement.||0,06% par jour de retard de la TVA due.||0,06% par jour de retard de la TVA non payée.|
|Finland||A fine of up to 5000 euros.||Declaration filed less than 45 days after the deadline: 3 euros of penalties per day Declaration filed more than 45 days after the deadline: 135 euros and 2% of the VAT due. The penalty applied per tax per period cannot exceed 15,000 euros.||A penalty of 10% of the VAT due. In case of repeated errors a fine of 15 to 50% of the VAT due. When there is no VAT due the fine is 200 euros.||Late payment interest of 7% per year.|
|France||No additional fine than those provided for non deposit and late payment of VAT||A fine of 5% of the amount of VAT due and : – 10% if paid within 30 days of receipt of the rectification proposal – 40% if not paid within 30 days of the rectification proposal – 80% if not paid within 30 days of the second rectification proposal When the company only carries out operations taxable at 0%, it is a fixed fine of 150 euros.||Failure to reverse charge: 5% of deductible VAT unless spontaneous regularization. Same as failure to file the return unless spontaneous regularization.||5% of the VAT amount and 0.2% late interest per month.|
|Germany||None||A fine of 10% of the VAT due, up to a maximum of 25,000 euros.||A fine of 0.5% of the undeclared amount (whether positive or credit) per month of delay.||A fine of 1% of the VAT due per month of delay.|
|Greece||A fine of 100 euros||A fine of 100 euros per declaration when there is no VAT due. A fine of 250 euros or 500 euros when there is VAT due. A penalty equal to 50% of the undeclared VAT or a fixed penalty of 250 to 500 euros is applicable, whichever is higher.||In the event of a tax audit, if there is a discrepancy between what is declared and what is due, the administration may apply a penalty of 50% on the difference.||0.73% monthly interest on arrears.|
|Hungary||None||A fine of up to HUF 500,000 (approximately 67,204 euros) at the discretion of the tax authorities.||Penalty of 50% of the undeclared VAT||The annual default interest rate is twice the official rate of the National Bank of Hungary|
|Ireland||A fine of 4000 euros||A fine of 4000 euros per declaration||If the error is deliberate, the amount of the fine is between 3000 and 5000 euros The administration, at its own discretion, may apply other penalties depending on the seriousness of the infraction retained.||0.0274% per day of delay and a potential fine of 4000 euros per declaration.|
|Italy||A fine of 500 to 2000 euros||A fine of between 250 and 2000 euros. In case of late filing of the annual return 120% to 240% of the VAT due with a minimum of 250 euros.||A fine of between 90% and 180% of the difference between what was declared and the exact amount to be declared.||Penalties are between 0.1% and 3.75% per day of delay.|
|Latvia||A fine of 100% of the VAT due that should have been paid from the date on which the company had to register for VAT||A fine of 700 euros per declaration||Between 10% and 50% of the undeclared VAT||Interest on late payment of 0.05% per day of delay. Between 10% and 100% of the VAT due depending on the amount of undeclared tax.|
|Lithuania||A fine of between 200 and 390 euros||A fine of between 200 and 1040 euros per declaration||A fine of between 10% and 50% of the undeclared VAT||Interest on arrears: 0.03% per day of delay.|
|Luxembourg||A fine from 250 to 10,000 euros.||A fine from 250 euro to 10,000 euros. In case of filing a nil return with a posteriori the filing of a corrective return this offense may be requalified as tax fraud.||Same penalty as for not filing. In case of spontaneous regularization the penalties are generally not applied.||A fine from 10% up to 50% per year of the VAT due. If a formal notice has been issued the administration will apply in addition a late payment interest of 7.2% per year from the issuance of this formal notice.|
|Malta||Une amende d’une valeur pouvant aller jusqu’à 20% de la TVA due||Une amende d’une valeur de 1 à 250 euros par déclaration.||Une amende d’une valeur comprise entre 10% et 20% de la TVA due non déclarée.||Une amende comprise entre 1 et 250 euros par déclaration et 0,33% par mois de retard du montant de la TVA due et des pénalités.|
|Netherlands||In case of involuntary error: no penalty In case of voluntary error: from 25% to 100% of the VAT due and possible criminal prosecution.||A fine of 68 to 136 euros per declaration||For errors over 1000 euros, it is required to refill the VAT return and inform the administration. If the error is not notified to the administration, it can apply a penalty of 100%. If the voluntary regularization leads to an amount of VAT to be paid higher than 20,000 euros and this amount is higher than 10% of the amount initially declared then the administration applies a penalty of 5% with a maximum of 5514 euros.||A fine of 3% of the VAT due with a minimum of 50 euros and without the fine exceeding 5514 euros.|
|Poland||A fine of up to 5600 PLN (about 1230 euros) In some cases the fine can go up to 56,000 PLN (about 12307 euros).||A fine of up to 5600 PLN (about 1230 euros).||Up to 5600 PLN.(about 1230 euros) in penalties A penalty between 15% and 10% of the VAT due.||A fine of up to 5600 PLN. (about 1230 euros) in penalties. Late interest rate between 4% and 12% per year on undeclared VAT.|
|Portugal||A fine of 600 euros to 15,000 euros||A fine of 300 to 7500 euros depending on the infraction||Interest on late payment of 4% per year on undeclared VAT.||A fine of between 50 euros and 165,000 euros depending on the offence. Annual default interest rate of 4.705%|
|Romania||A fine between 1000 and 5000 RON (about 202 and 1010 euros)||Failure to file on time: a fine of between 1000 and 5000 RON (approximately 202 and 1010 euros); Filing an incomplete declaration: a fine of between 500 and 1500 RON (approximately 101 and 302 euros)||None||Late payment interest: 0.02% per day of delay Late payment penalties: 0.01% per day of delay.|
|Slovakia||A fine from 60 to 20,000 euros||Minimum 30 euros per late-filed declaration. Maximum 16,000 euros per late-filed declaration If the declaration is not filed after a reminder, the maximum penalty is increased to 32,000 euros.||– a penalty equal to the interest on arrears fixed by the ECB (at least 3%) per year if the corrective declaration is made before any tax audit – a penalty equal to twice the interest on arrears set by the ECB (at least 7%) per year if the amending declaration is made within 15 days of the start of a tax audit – a penalty equal to three times the ECB’s late payment interest (at least 10%) per year if the corrective declaration is made after a tax audit.||Application of 4x the late payment interest rate of the European Central Bank or a minimum of 15% of the VAT due|
|Slovenia||A fine from 4,000 to 125,000 euros depending on the size of the company and the seriousness of the offence||A fine from 1,000 to 125,000 euros depending on the size of the company and the seriousness of the offence||A fine from 1,200 to 30,000 euros depending on the size of the company and the seriousness of the offence.||A fine from 1,000 to 125,000 euros depending on the size of the company and the seriousness of the offence; Application of late payment interest determined by the tax authorities.|
|Spain||At the discretion of the tax authorities||Late filing spontaneously: 100 euros of penalties Late filing at the request of the administration: 200 euros||A fine of 20 euros per missing information with a minimum of 300 euros and a maximum of 20,000 euros.||Delay in payment Less than 3 months: 5%. Between 3 and 6 months: 10%. Between 6 and 12 months: 15%. Beyond 12 months: 20% and interest on late payment of 3.75% per year An abatement of 25% applies on late payment penalties in case of voluntary payment.|
|Sweden||None||A fine of 625 SEK (approximately 59 euros) per declaration||In the event that purchases/sales are allocated to the wrong reporting period a penalty of 2-5% of the incorrectly allocated amount may apply. If incorrect information is reported a fine of 20% may be applied to this amount.||None|
The list of applicable penalties is not exhaustive and remains at the discretion of local governments.
Please note – in addition to the applicable offenses below, jurisdictions may initiate criminal proceedings and apply additional fines for tax fraud.
Other penalties applicable to VATOther sanctions may be added to the penalties applicable to VAT:
EC Sales List & INTRASTAT DeclarationsThe EC Sales List and the INTRASTAT declarations are complementary and mandatory declarations. Companies that fail to file these returns may be subject to penalties. Some countries, such as Slovenia and Portugal, impose heavy penalties for not filing these declarations. Examples: 1. Slovenia & ESL: Slovenia penalizes with a fine from 4,000 euros to 125,000 euros per EC Sales List declaration depending on the size of the company and the seriousness of the offence. 2. Portugal & INTRASTAT: Portugal fines from 500 to 50.000 euros for each unfiled INTRASTAT declaration.
Electronic invoicingSome countries have already implemented electronic invoicing or real-time invoice reporting systems to facilitate the remittance of VAT tax obligations. Failure to declare invoices in the required format may result in severe penalties. Example: Hungary & electronic invoicing The Hungarian administration can apply a fine up to HUF 500,000 (approx. 1,260 euros) per undeclared invoice.
Intra-community VAT is a complicated subject and national regulations change frequently. To do not risk a misinterpretation or miss an important deadline, a permanent watch, a sharp expertise and dedicated services are mandatory.