Form 349 is required for companies and self-employed individuals who work with companies based in other European Union countries.
Find out what it is, how it works, and how it affects corporate management.
What is form 349 from the Tax Agency?
Form 349 is an informative declaration from the Tax Agency related to intra-Community transactions.
Basically, it consists of recording all purchase and sale transactions with companies in the European Union on a form on a quarterly or monthly basis.
Why is form 349 so important?
The reason is very simple: invoices issued to countries in the European Union are VAT-free.
You must first apply for and be granted an ROI (Intra-Community Operator Registration) number. From then on, in addition to the usual quarterly VAT returns, you must report all transactions with intra-Community companies.
This is designed for companies that usually work with the European Union.
The purpose of this informative declaration is, ultimately, to find out what the intra-Community activity of companies is.
And this is not a minor issue, because, currently, the Tax Agency deregisters companies that have not invoiced in the European Union for more than two quarters.
The impact of the 349 model on business management
There are several reasons why form 349 has a significant impact on current business management.
The main reasons are as follows:
1. Submitting form 349 is mandatory
First and foremost, it is important to understand that submitting this informative declaration is not voluntary; it is a tax obligation.
This is one of the points you must take into account among the documentation required by the Tax Agency.
It is monthly for invoices over £50,000 and quarterly for those under £50,000.
Failure to do so exposes you to problems with the Administration.
Some self-employed workers and SMEs may encounter problems due to ignorance of the regulations.
And this is essential: as soon as there is an obligation, it must be recorded, even if the result is zero.
Therefore, it is an issue that must be taken into account.
2. Failure to submit the form exposes you to administrative penalties
Failure to submit this declaration exposes you to administrative penalties in various ways.
Firstly, because by not submitting the documentation in the correct manner and within the deadline, you are failing to comply with a tax obligation.
Secondly, because when certain transactions are not recorded, VAT or other tax payments do not reflect the reality of the situation; this may also result in penalties for not declaring transactions.
In short, this documentation must be in order to avoid future problems with the Tax Agency.
For the self-employed or SMEs, understanding how the Tax Agency works is complex.
Therefore, the best advice we can give is to seek the help of specialists to avoid misunderstandings.
3. Risk of being removed from the ROI
Another problem associated with not having form 349 up to date is that you may be removed from the ROI.
In fact, the tax authorities can do this automatically if you do not carry out any transactions for two consecutive quarters.
Although it is true that the procedure varies depending on the local office, it is generally advisable to have this information in order.
This will help you avoid setbacks that could mean additional costs when working.
Although you can re-register with the ROI, it is a complicated bureaucratic process.
And the question is, why wait until you have problems?
It is best to settle the matter as soon as possible and, above all, avoid setbacks.
4. Tax savings
Having your documentation in order will also help you save money. Why?
Because remember that an intra-Community invoice you issue to another company is exempt from VAT, otherwise you would have to pay it.
Likewise, as the expenses you incur will be declared, this can be applied when reducing your tax base.
In practice, keeping this form up to date is a way to save on taxes.
It is, in effect, part of a tax optimisation strategy.
Preventive measures are often underestimated, but they can lead to tax savings.
For this reason, they should be taken whenever possible.
It is worth keeping this in mind.
