Everything You Need to Know about EU VAT Registrations

Manage the complexities of EU VAT registration with key insights from senior VAT experts at Taxback International. These process have been made even more complicated for businesses due to Brexit.

Contact us today for more information on how our solutions can transform your VAT management. 

Understanding EU VAT Registrations

When your business expands outside your country of establishment, dealing with different EU VAT registrations can be difficult. Depending on the region, VAT gets applied differently depending on your customer taxable status, your supplies, and the specific rules of the country.

Your business may be an EU established business or a non-EU established business and this can make a difference, too. Today, let’s explore the “who, when, and what?” of VAT registration in the EU.

Throughout we’ll be keeping in mind the different requirements applicable to EU established businesses vs. non-EU established businesses.

When do companies have to register for an EU VAT number

Generally, VAT registration is required for EU established and non-EU established businesses that carry out the following transactions in the EU:

• Importing goods into the EU via another EU member state.
• Trading (buying and selling) goods in an EU member state.
• Using warehouse facilities for sales of stored goods to local customers (business and non-business customers).
• Intracommunity sales (dispatches) or purchases (acquisitions) of goods from another EU member state.
• Online distance sales (e-Commerce) to consumers made from another EU member state.
• Running live conferences or events with paid admission on the door in EU member states.
• Non-VAT registered traders receiving services that are subject to the domestic reverse charge rule.
• The self-supply of goods also triggers the liability to register for VAT.

The transactions above may all attract a VAT registration in the member state where they are carried out. The requirement to register for VAT at a specific time varies depending on where the business is established.

Locally established businesses must register in their own country upon exceeding a turnover threshold that varies from country to country. EU and non-EU established businesses that are not locally established are both required to register immediately or before they start their transactions in any EU member state and no threshold applies.

An exception applies to EU established e-commerce businesses: exceeding a combined threshold of 10,000 EUR for sales made B2C across all EU member states requires them to either register for VAT in each country of sale or apply for the One Stop Shop “OSS” scheme in their own country of registration. This is a simplification that allows businesses to charge VAT at the rate of the country of sale and declare it their own country’s OSS VAT return portal, without having to register in each country of sale. 

How do companies get an EU VAT number?

Businesses established in the EU may obtain a VAT number by applying directly to the tax authorities in the country where the registration is needed. Non -EU established businesses may be required to appoint a tax representative to register, submit and pay their VAT liability.

However, it is important to note that whilst few European member states allow voluntary registration for businesses that are not resident in the country, mostly, VAT registrations are rejected if the applicant is not required to register.

What happens after an EU VAT number is received?

As soon as a VAT number is received, a business becomes a taxable person for VAT purposes in the country of registration and is subject to all the local VAT rules. But mainly, the newly registered business will have to start applying local VAT on its supplies and submit local VAT returns on a regular basis to account for VAT on sales and expenses.

In fact, an advantage for registering for VAT is that VAT on expenses can be claimed in the country of registration via a VAT return.

Each EU member state has its own deadlines and compliance requirements; there are language barriers too and some peculiarities in the application of the EU VAT rules specific to each country. Therefore, managing various VAT registrations and related compliance can be complex for both EU and non- EU established businesses. Especially tracking deadlines for submission and payments.

Need Help with EU VAT Registration?

At Taxback International, we are at the forefront of VAT compliance technology and have developed Comply to help businesses efficiently tackle compliance obligations. Comply can assist with assessing the needs for VAT registration, with VAT return preparation, submission, and payment through the platform. Benefit from our unique software that provides full visibility on your VAT return status and a fully automated end-to-end VAT return process.

If your business is in need of assistance with managing multiple VAT registrations across various jurisdictions, contact us today.