VAT Registration and Administration

We can be your one stop shop for VAT registration.

Some organizations should be registered for VAT, or have a clear advantage in doing so, and are not because they have not fully understood the VAT implications of their activities.

In countries around the world, foreign entities, which make purchases or make order to local subcontractors, are not allowed to deduct the input VAT from these invoices. A method of avoiding this inconvenience is the registration of the foreign company.

In some EU countries, registration for VAT is compulsory in certain situations, but also available on a voluntary basis subject to specific criteria. For example, in such countries, companies must register for VAT when:

The value of their taxable supplies exceeds the registration threshold
The value of their distance sales to another EU country exceeds the distance selling threshold
The value of their acquisitions from other EU countries exceeds the registration threshold
The company make relevant supplies in other countries (regardless of their value)

We will look at all your business activities and determine whether you should be VAT registered. If this is the case, we will help you register, quantify the sums involved and deal with VAT Authorities the VAT position from the date that you should have first registered. Alternatively, there may be benefits in the organization voluntarily registering for VAT and we will again quantify these benefits to help the business decide whether the potential advantages outweigh the increased administration costs.

Should you be VAT registered? Can you save money by registering for VAT? Contact us now

When is necessary, for non-EU companies, be registered in the EU?

More and more non-EU international trading companies are finding increasingly difficult to do business with other companies domiciled in the EU due they are not registered for VAT in the EU.

Non-EU incorporated company purchasing goods in one EU country and selling those goods in another EU country should also be registered for VAT somewhere within the EU.

When a non-EU company conducts business in Europe, VAT registration is necessary in order to get the refund. To secure it, VAT registration should be done prior to the business deal in some cases.

It is not necessary to have an established business/location in Europe in order to register for VAT. Many non-EU companies are registered in one or many European countries without any physical presence and without any other international tax consequences.

Examples of situations requiring VAT registration:

Global Billings - More and more global activities result in global billings for services and products. This is a practical routine for both the service provider and the global customers. If part of the service takes place in Europe, it is common that European VAT must be charged. The global provider must ensure that they are VAT registered accordingly, and that the billing to the global customer is done in a manner that ensures VAT refunds.
Import - Sometimes , when selling to the EU countries, the foreign seller chooses to act as the "importer of record". The most costly part of the import fees will be VAT. In most cases, VAT registration in the country of import is required in order to get the VAT refund.
Warehousing in Europe - If the products are warehoused in a "bonded warehouse" before import, the import fees can be delayed. However, if the seller chooses to also be the importer, VAT registration is necessary in order to secure refunds of the import VAT.
Installation and Service Contracts - Installation and service contracts are common when selling products to European customers. Sometimes the non-EU seller contracts with European vendors to perform the installation or the maintenance service. The EU contractor will send invoices to the non-EU seller for their services. VAT is most likely included in these invoices. In order for the non-EU company to reclaim the VAT incurred from the EU installation or service company, VAT registration may be necessary.
Online Sales - A Non-EU company providing digital products, services, software or applications to private European customers over the Internet (including E-commerce) is subject to the EU VAT rules starting year 2003. This translates to mean that the non-EU company, in most instances is liable for charging European Value Added Tax on the invoices to the European customer. It will be necessary to:

 1. Register for VAT in one of the European countries.
 2. Assess (charge) VAT on all of the invoices to the private consumer located in the EU countries.
 3. Deduct the VAT paid on most invoices to the European vendors.

The Non-EU company that sells digital products to a VAT registered business in the European Union is, in most cases, not required to charge VAT.

Corporate Meetings/ Conferences/Exhibitions -A foreign company producing a meeting, conference or exhibition in Europe is, in most cases, subject to VAT if any fees are to be collected for this event. This mean that the foreign company is legally required to:

 1. Register for VAT in the European country where the event takes place.
 2. Assess (charge) VAT on all invoices issued regarding the event (i.e. to the corporate client/conference attendees/sponsors).
 3. Deduct the VAT paid on most invoices to the European vendors.

If the foreign company does not comply with EU VAT laws, they will:

Incur a tax penalty for violation of VAT laws, if discovered.
Decrease their profit margin because none of the VAT incurred from the European vendors will be refundable.

Note that VAT registration must be done at the planning stage of the event.

But, if no fees are to be collected for the corporate meeting, conference or exhibition taking place in Europe, the VAT incurred from the European vendors can in some cases (see VAT recovery) be reclaimed without prior VAT registration.

Drop-Shipping in Europe - A non-EU company shipping products in one or between the EU countries is "drop-shipping" within EU. Most likely, VAT will be charged on the invoice from the European vendor regardless of where the buyer is located. In order for the non-EU resident company to get the VAT refund, VAT registration is usually necessary. The non-EU company must register in one of the EU countries, and is required to charge VAT to the buyer of the products regardless of where they are located. If VAT registration does not take place, the VAT incurred from the European vendor can, in most cases, not be reclaimed.

The European VAT rules are very complex and vary from country to country. Contact us for details relating to your company's specific situation