How does the VAT control system of trading in the Internal Market work?

The authorities of EU member countries work together to oversee commercial operations with goods and services between EU countries. They exchange the tax information with one another that has been obtained from taxpayers’ VAT returns.

The Finnish Tax Administration compares the VAT-return information received from sellers with that received from purchasers. These comparisons are one way to ascertain that the correct amounts of VAT have been paid on all purchases of goods and services. The VAT information from sellers arrives in Finland through the channels known as VIES. If the authorities can find acceptable proof that the VAT information from the seller matches the purchaser’s information, it is not necessary to implement further methods of tax control.

The VIES data is based on EU VAT information reported by foreign sellers

The Value Added Tax Information Exchange System, VIES, is a resource that stores control data on trading with goods and services. The data comes from the VAT-liable business enterprises in various EU countries.

It is important that the contents of the Value Added Tax Information Exchange System are up-to-date and that they do not contain errors. Unnecessary work can be avoided when the relevant VAT information is reported correctly on every business taxpayer’s VAT return, and no information is missing. If the tax control arrangements are in place and the information is exactly right, a level playing field is created for all compliant business enterprises so their positions are improved when they compete with one another.

See also:

• “VAT treatment of international trade – “Ulkomaankaupan arvonlisäverotus”
• “International trade” – Kansainvälinen kauppa
• “The VAT number” – VAT-numero
• Filing and correcting of VAT EU Recapitulative Statement