- In most European countries, a VAT-registered business must file VAT returns for every period even if there were no sales; a nil return is still required and a missing nil return is treated as a late/missing return.
- “No sales” may still be inaccurate for VAT purposes because stock transfers, refunds, storage, and fulfilment fees can create reportable transactions.
- Country examples: Germany, France, Spain, Italy, Poland, and the UK all require ongoing filings while registered, with penalties ranging from surcharges/estimates to penalty points and fines.
- Some tax authorities can deactivate or remove dormant VAT numbers automatically if no activity is reported for a set period (for example, Poland after six months with no sales or purchases), which can create problems if the business resumes trading.
- Letting a VAT number lapse or be deactivated can leave compliance issues and may require a fresh registration later, so businesses should decide whether to keep filing nil returns or deregister properly.
Source: hellotax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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