390 & 394 Statements

We would like to draw your attention with respect to the information included in the VAT declarations and their impact on establishing the level of tax risk for companies.

The initiation of a tax inspection is determined by the risk analysis performed by fiscal authorities. Among others, the risk analysis is also performed based on the information declared in the statements:

  • 390 regarding intra-community operations (VIES), amounts mentioned in the VAT returns on the amendments rows, transactions performed with inactive taxpayers or with taxpayers with cancelled VAT number;
  • 394 regarding local transactions performed by persons registered for VAT purposes.

During tax inspections, most often, differences are identified between the amounts declared by the company and the ones declared by the company’s clients and suppliers. Such inconsistencies may lead to an extended tax inspection until the respective differences are clarified and the tax authorities decide to perform cross-checks with the company’s clients and suppliers.

To prevent the undesired effects of the information reported in the tax return forms in relation to the company’s customers and suppliers, we propose an analysis of such inconsistencies derived from the 390 and 394 declarations as well as a transaction analysis with inactive companies or companies with cancelled VAT number.

How can Mazars help you?

  • Obtaining the reports regarding the inconsistencies from the 390 and 394 declarations;
  • Reviewing and explaining the respective inconsistencies;
  • Discussions with the representatives of the company related to the potential justifications or explanations regarding the respective differences;
  • Assistance in contacting the customers and suppliers to receive explanations regarding the differences and to correct the declarations;
  • Analysis of the existence of transactions with inactive taxpayers or taxpayers with cancelled VAT number.

The non-existence or the existence of minor differences regarding the amounts declared in the tax return forms would lead to a reduction of the tax risk. This could be further transposed into a VAT refund decision with a subsequent tax audit or could postpone the decision to start a tax audit.

Another major benefit for the company resulting from solving the respective differences is the shortening of the tax audit duration as the clarification of the differences in the declarations would no longer be necessary.  

VAT Hunter - Mazars solution for verifying VAT codes

Mazars developed VAT Hunter which enables the automatic and real-time verification of the VAT IDs of companies.

The application, which works with any internet browser and is mobile-friendly, can be used for the following:

  • Simple or multiple verifications of the VAT IDs;
  • Adding additional information to the existing VAT purchase ledgers from the official database of the Ministry of Finance;
  • Providing information regarding the companies (e.g. name, address);
  • Providing information regarding the VAT status (VAT registered or not, the date of registering for VAT purposes, the date of VAT registration cancellation);
  • Providing information regarding the validity of the VAT ID in VIES;
  • Providing information regarding the VAT payment (if the company applies VAT cash accounting scheme, the beginning date of applying, until when, the date of publication);
  • Providing information regarding the activity (if the company is inactive, periods of inactivity, if the company is VAT deregistered);
  • Verifying an unlimited number of VAT IDs;
  • Verifying files in .XLS format or standard statements in. XML format;
  • Performing upon request checks based on the purchase ledgers obtained from various applications (e.g. Ciel, Winmentor, SAP etc.)