VAT Registration Guide
Where you have an established business, it is likely that you have registered for VAT, but it may also be necessary to obtain non-resident VAT Registrations in additional countries where you are trading.
VAT Registrations enable businesses to charge and recover appropriate local VAT where applicable for their business. In some countries, thresholds may be in place so that a VAT Registration is only necessary once the turnover exceeds an annual limit, but in many EU countries there are no thresholds for VAT Registration – it is essential that businesses consult local VAT legislation to establish if they have a requirement to obtain a VAT Registration.
Why might a VAT Registration be necessary?
- Running an event, conference or exhibition
- Making online sales to private individuals
- Supplying and installing machinery
- Making supplies related to land situated in a particular country
- Making supplies to local customers from a warehouse based in another country
- Importing goods
- Opening a warehouse
VAT Registration Applications
To secure a VAT Registration, an application must be made directly to the country where you are required to register. Local tax authorities will often have questions and queries surrounding this process, so it is often necessary to have local language skills to ensure you are making the right decisions for your business.
How to achieve VAT Registration Compliance:
1. Review your international business activity
VAT legislation varies between countries, so it is essential that business activity is reviewed in each country where you are trading to identify whether a VAT Registration is appropriate.
2. Get VAT Registered
If your business activity does make you liable to register for VAT, it is important that this is put in place as soon as possible so that your business is able to invoice clients correctly, and avoid risks of fines and penalties.
3. Ensure your invoices are compliant
Once you are VAT registered, you will need to charge the appropriate VAT rate to your clients, and pay this over to the local tax authority. Things to consider include:
- Customer information
- Supplier information
- Transaction details
- The Reverse Charge
4. Ensure you are submitting the correct reports
Once registered you will need to submit local VAT returns, but Intrastat declarations and EC Sales Lists may also be required. Requirements for reporting vary between countries, as does the frequency of required reports.
5. VAT Payments and Reclaims
Where you are reclaiming local VAT incurred through your VAT return, it is important to ensure that the VAT has been charged to you correctly – if you have paid the VAT in error, you may have problems recovering it.
Where you need to pay VAT over to local tax authorities, you will need to consider the timescale for making international payments. There can be significant fines and penalties if you miss your VAT payments.