What are nil VAT returns?
Nil VAT returns involve the filing of a VAT return that states no sales were made and therefore no VAT is due. While there is occasionally a genuine need for nil VAT returns, often they are filed to ensure customers remain compliant with the relevant tax authorities filing deadlines. A nil VAT return can often be corrected later, but a fee will apply.
How are nil VAT returns different from non-filing?
Nil-filing is different from non-filing as a nil-filing is a submitted return that has nil figures while non-filing is when no return is filed. Some countries require nil-filing when there are no figures to declare and some countries require non-filing when there are no figures to declare. Avalara VAT Returns supports both non and nil filing. Avalara will use whichever method is most appropriate to your tax situation and regulatory environment.
Filing of nil VAT returns
Avalara may file nil VAT returns in one of two scenarios:
- When specifically requested by a customer: Nil VAT returns occasionally need to be requested, for example, when trading has not yet started, no sales have yet been made in a VAT registered country, or when a customer is aware that they won’t be able to provide data in time for a specific filing period.
- Missed filing deadlines: In certain regions, Avalara may file a nil VAT return when a customer fails to provide transaction data by the filing deadline. This is done to assist customers with remaining tax compliant.
Requesting a nil VAT return
Avalara requires communication stating that the customer requires a nil VAT return to be filed. This communication must state the period and country where the nil VAT return filing is required. Please submit this information to the returns team using the website messaging feature or Submit a case. When requesting a nil VAT return due to a deadline that is likely to be missed, please request the nil VAT return as far in advance as possible to avoid delays with filing.
All countries other than Germany, Spain, Italy, and the United Kingdom
When no data has been received by the filing deadline, or when the data received cannot be processed Avalara will file a nil VAT return.
United Kingdom (UK)
Avalara can file a nil VAT return, however, if there is a liability to pay, Avalara will use the following approach:
- If the liability is <£10k, Avalara will add it to the next submission.
- If the liability is >£10k, Avalara will be required to file a correction.
The chart below helps to illustrate the process for UK nil returns.
If the customer fails to provide their transaction data on time, Avalara will not file a return and the customer will be responsible for all penalties and fees incurred.
Avalara will not file any returns without first receiving proof of payment and confirmation from the customer that Avalara can file the return, this includes the filing of nil VAT returns. If the customer fails to confirm their return, fails to provide proof of payment, or fails to provide their transaction data on time, Avalara will not file a return and the customer will be responsible for all penalties and fees incurred.
Avalara does not file nil VAT returns for quarterly submissions in Italy. Avalara may file a nil VAT return for annual submissions in Italy. If a customer does not provide their full set of data by the annual filing deadline, Avalara will file a nil VAT return and then a subsequent amendment once all of the data is received. The customer will be required to pay a late filing fee if an amendment to a nil VAT return filing is required.
Troubleshooting nil VAT returns
The VAT Returns FAQ page lists the most commonly asked questions about the Avalara VAT Returns service. If you are still unsure about nil VAT returns, please submit this information to the returns team using the website messaging feature or Submit a case to Support.