When is a business required to register for VAT?
If you are an online seller or sell across borders, do you know when your company must VAT register in the country you are supplying to?
If you have a business that sells either goods or services to businesses and/or consumers either domestically or abroad, then you may need to register for VAT in each country you sell into.
When does my business need to register for VAT?
The rules around VAT registration vary in each tax jurisdiction. The VAT thresholds in each country are unique and may even vary according to the business activity performed by your company. If your company is performing any of the below taxable activities (or any other activities that are deemed taxable), you must adhere to the VAT laws of the country where the supply arises – which can include VAT registration, and periodic VAT returns or VAT filings.
Examples of activities in foreign countries that may trigger VAT obligations:
- Importing goods into the country for onward sale or distribution,
- Storing goods in a warehouse for onward sale or distribution,
- Buying and selling goods locally,
- Selling goods over the internet (turnover thresholds apply),
- Events in the country,
- Providing telecommunications, broadcasting or electronic services to consumers.
In many EU countries, there are VAT registration thresholds in place, meaning that you do not need to register for VAT until you reach a certain volume of sales. The full list of EU VAT thresholds can be found here.
VAT Registrations for online and distance sellers
Any businesses selling goods online to consumers in other countries where they are not already VAT registered will very likely have an obligation to register for VAT online if they hit the threshold for sales in that country. Taxback International can assist you with VAT registrations if your business is selling abroad, along with helping you to understand if you should charge VAT on services to overseas customers.
VAT for Amazon sellers
Businesses selling goods online through Amazon to consumers in other countries may have additional registration requirements if they are using Fulfilment by Amazon, which will give rise to VAT registration obligations in countries where they hold stock. Taxback International are an approved Amazon VAT provider, we take care of VAT registration with Amazon, and subsequent multi-jurisdictional VAT obligations.
Once a company is VAT registered, what happens?
Once registered for VAT your business must submit monthly/ bi-monthly /quarterly /bi-annual and /or annual VAT returns with the relevant tax offices where the taxable supply has occurred.
VAT Compliance describes the process associated with the VAT registration of a business for VAT in a specific country /jurisdiction and the preparation and subsequent submission of the associated monthly, quarterly and /or annual VAT filings associated with that VAT registration.
What are the penalties for not registering for VAT?
If you fail to register for VAT at the appropriate time, your business could be liable for a late registration penalty. Ignorance is not an acceptable excuse to avoid a penalty. The longer the period that you failed to register for VAT, the greater the penalty will be. VAT obligations are not an option, they are compulsory.
Work with real VAT experts
Taxback International will analyse and review your business’s activities to determine if a VAT registration obligation exists in a particular country. If VAT registration is required we will prepare all necessary documents, forms and supporting documentation and submit and follow the request for VAT registration to the relevant tax office(s) until complete.
With over 15 years’ experience in the area of VAT compliance and consultancy, we handle all countries and languages where VAT obligations exist. We have a dedicated & centralized team of VAT experts, with a reputation of excellence within all global tax offices ready to speak to you about your VAT obligations.
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