Businesses act as tax collectors on behalf of the government: they must collect VAT from their customers and then pay it to the Treasury.
The rules of the VAT game are complex and mistakes made by companies in the management of their reporting obligations (e.g. inclusion of a transaction in the wrong box of a VAT return) are frequent.
The bad news? Each error is usually subject to an automatic and immediate financial penalty. Administrative fines are imposed for incorrectly filled in registration forms, for issuing inaccurate invoices, for late submission of VAT returns, for poorly structured communication on a payment order, for incomplete accounting ledgers, etc.
The good news? The company that has to pay a penalty can defend itself.
Source vatdesk.eu
