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VAT Registration

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Navigating the complexities of VAT registration can be a challenging and time-consuming task for businesses. However, Global Trade Business is here to simplify the process and provide comprehensive support to streamline your VAT registration journey, making it hassle-free and efficient.

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VAT registrations and returns
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What's a VAT number?

A VAT number in the European Union (EU) is a unique identifier assigned to businesses registered for Value Added Tax (VAT) purposes. It allows businesses to collect and remit VAT on their sales, claim input VAT on their purchases, and fulfill VAT reporting obligations. VAT numbers help facilitate tax administration and enable businesses to engage in intra-EU trade by providing a standardized identification system across EU member states.

When do you need a VAT number?

You typically need a VAT number in the following situations:

Ensure compliance with regulations when

     - conducting local purchases and sales within EU member countries.
     - stocking your products in an EU country.

- Cross-Border Transactions: If your business engages in cross-border transactions within the EU, such as selling goods or providing services to customers in other member states, you usually need to register for VAT in those countries and obtain VAT numbers accordingly.

- Voluntary Registration: Even if your turnover does not reach the threshold or you don't engage in cross-border transactions, you may choose to register for VAT voluntarily. This can be beneficial if you want to reclaim VAT on your business expenses or if it is advantageous for your operations or market positioning.

It's important to note that specific VAT registration requirements can differ between EU member states, so it's advisable to consult the tax authorities of the relevant country or seek professional advice to determine the exact circumstances under which you need a VAT number.

How to get a VAT number?

Appointing a fiscal representative may be necessary in certain cases to register a VAT number in a foreign country. The requirement for a fiscal representative often arises when a business does not have a physical presence or a permanent establishment in the country where VAT registration is sought.

What does a fiscal representative do?

VAT Registration

To help with VAT registration by handling forms, documentation, and liaising with tax authorities for a smooth process.

Communication with Tax Authorities

To act as a liaison between the business and foreign tax authorities, managing correspondence, inquiries, and requests from tax authorities.

VAT Compliance

To ensure local VAT compliance by applying relevant rules, maintaining proper invoicing and records, and accurately reporting VAT liabilities.

VAT Payments

To help with VAT payments, assisting the business in understanding payment obligations and facilitate timely submission of VAT payments.

VAT Returns

To prepare and submits VAT returns in line with foreign country requirements. They compile data, calculate VAT amounts, and file returns accurately and on time.

VAT Audits and Disputes

To assist in gathering documentation, represent the business during the audit, and help resolve any disputes that may arise.

What documents are required for VAT registration?

The specific documents required for VAT registration in the EU can vary slightly between countries. However, here are some common documents that are typically requested during the VAT registration process:

  1. Proof of Identification: This includes documents that establish the identity of the business owner, such as a copy of the passport or identification card.

  2. Certificate of Incorporation: A certificate or extract from the company's commercial register, confirming the legal existence and registration of the business.

  3. Articles of Association: The official document outlining the company's structure, purpose, and regulations.

  4. Proof of Address: Documents demonstrating the business's registered office or place of business, such as a utility bill or lease agreement.

  5. VAT Registration Form: The specific form provided by the tax authorities to collect information about the business, its activities, and its VAT registration intentions.

  6. Supporting Business Documents: Additional documents may be required to establish the nature of the business's activities, such as invoices, contracts, purchase orders, or proof of import/export activities.

It's important to note that these requirements are general guidelines, and the specific documents needed may vary depending on the country and the nature of the business. It's advisable to check with us to ensure compliance with the specific VAT registration requirements in a particular EU country.

How long does it take to receive a VAT number?

The time it takes to receive a VAT number can vary depending on the country and the specific circumstances. It generally takes around 4-8 weeks to receive the VAT number.

Case study: A Chinese company needs to register a FR vat number in order to do importation.

Company Name: XYZ Imports Co., Ltd.

Background:
XYZ Imports Co., Ltd. is a Chinese company planning to import goods into France. They want to understand why obtaining a French VAT number is necessary for their import activities.

Steps Taken:

  1. Researching French Tax Regulations:
    XYZ Imports researches French tax regulations to understand the requirements for importing goods into France.

  2. Engaging with Global Trade Business:
    To gain clarity, XYZ Imports consults our VAT experst specialising in cross-border transactions between China and France.

  3. Understanding VAT Collection:
    They learn that a VAT number is needed to collect and remit VAT on imported goods, ensuring compliance with tax regulations.

  4. Compliance with French Import Regulations:
    Obtaining a French VAT number is crucial for complying with import regulations and facilitating customs clearance.

  5. VAT Liability Calculation:
    With a VAT number, XYZ Imports can accurately calculate VAT liabilities based on customs value, including customs duties and charges.

  6. VAT Deduction and Reclaim:
    A VAT number allows them to claim deductions for VAT on import-related expenses and reclaim VAT, reducing overall liabilities and improving cash flow.

  7. Compliance and Penalties:
    Obtaining a French VAT number ensures compliance, avoids penalties, and mitigates risks of delays or audits.

 

Conclusion:
By obtaining a French VAT number, XYZ Imports complies with regulations, accurately calculates VAT liabilities, claims deductions, and avoids penalties. The VAT number facilitates customs clearance and supports smooth import operations. XYZ Imports maintains ongoing compliance and stays updated with tax regulations to ensure successful import activities in France.

EU VAT registration and returns process

Understand your business operation and needs

Have a free consultation call with us.

One of our VAT experts will review your business activities and understand your needs to identify the VAT obligations. 

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Our team will ensure to have all the right data. After checking all information, our local team will proceed to VAT registration. The duration of registration process depends on the country.

Collect required data and documents 

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When you have the VAT number, you need to provide us all the declaration materials to file the VAT return on time.

Receive the VAT number and submit VAT returns

  • What are the differences between the 13th Directive and the EU VAT Refund Directive?
    The 13th Directive and the EU VAT Refund Directive (Directive 2008/9/EC) are both mechanisms that allow businesses to claim Value Added Tax (VAT) refunds in European Union (EU) member states. However, there are some key differences between these two directives. Here are the main distinctions: Scope and Applicability: 13th Directive: The 13th Directive specifically applies to businesses located outside the EU that do not have a VAT registration within the EU. It is designed for non-EU businesses to claim VAT refunds on eligible expenses incurred in EU member states. EU VAT Refund Directive: The EU VAT Refund Directive applies to businesses established within the EU, allowing them to claim VAT refunds on expenses incurred in other EU member states. It is applicable to VAT-registered businesses within the EU seeking cross-border VAT refunds. Application Process: 13th Directive: Under the 13th Directive, non-EU businesses need to submit a VAT refund application to the tax authorities of the EU member state where the VAT was paid. The application is typically made using a specific form provided by the tax authority. EU VAT Refund Directive: The EU VAT Refund Directive introduces a simplified and streamlined process for VAT refund claims within the EU. Businesses can apply for refunds electronically through their home country's tax authority, rather than submitting applications directly to each member state.
  • What VAT can be refunded under 13th Directive?
    Under the 13th Directive, non-EU businesses can claim VAT refunds on directly related business expenses incurred in European Union (EU) member states. While the specific eligibility criteria may vary between countries, here are some examples of expenses that are commonly considered directly related to business activities: Accommodation Expenses: VAT paid on hotel stays or rental accommodations for business purposes, such as attending conferences, trade shows, or client meetings, can typically be claimed under the 13th Directive. Meal Expenses: VAT paid on meals or restaurant bills incurred during business-related activities, such as client meals, team meetings, or business travel, may be eligible for a VAT refund. Transportation Costs: VAT paid on transportation expenses directly related to business activities, such as airfare, train tickets, taxi fares, or car rentals, can often be claimed under the 13th Directive. Trade Show or Exhibition Expenses: VAT paid on expenses related to participating in trade shows, exhibitions, or conferences, including booth rentals, registration fees, promotional materials, and related services, may be eligible for VAT recovery. Professional Services: VAT paid on professional services directly related to your business activities, such as legal fees, consulting fees, or marketing services, may be eligible for a VAT refund. Business Entertainment: VAT paid on entertainment expenses incurred for bona fide business purposes, such as client entertainment events, team-building activities, or business-related social functions, might be eligible for VAT recovery.
  • What documents are required for claiming the VAT refund?
    The documentation requirements for claiming VAT refunds can vary between countries and depend on the specific rules and regulations of the tax authority where you are submitting your VAT refund application. However, here are some common types of documentation that are often required: Valid VAT Invoices: You will typically need to provide original VAT invoices or receipts for the expenses on which you paid VAT. The invoices should include the necessary details, such as the supplier's name and address, your business's name and address, the invoice date, a unique invoice number, a description of the goods or services, the VAT rate applied, and the amount of VAT paid. Proof of Payment: You may be required to provide evidence of payment for the expenses on which VAT was paid. This can include bank statements, credit card statements, or other forms of payment documentation that demonstrate the payment was made. Import/Export Documentation: If you are claiming VAT refunds on import or export transactions, you may need to provide additional documentation such as customs declarations, shipping documents, import/export licenses, or proof of export. Proof of Business Purpose: Some tax authorities may require you to provide evidence that the expenses for which you are claiming VAT refunds were incurred for business purposes. This can include supporting documents like travel itineraries, conference agendas, or contracts that demonstrate the business nature of the expenses. VAT Refund Application Form: You will likely need to complete a VAT refund application form provided by the tax authority. The form will require you to provide information about your business, VAT registration details, the reporting period for which you are claiming the refund, and details of the eligible expenses. Please note that the specific documentation requirements can vary significantly between countries. Some countries may have more stringent requirements, while others may have simplified procedures for VAT refund applications.
  • How many VAT number do you need?
    Every country has their own VAT systems and hence to have its own national VAT number. When you sell from one EU country to another, if you hit the threshold of the local country, it is expected that you need to register the local VAT number.
  • How to check if your VAT number is valid?
    Each country has his own official website to check the validity of your VAT number. Of course you can still go to the VIES VAT number validation - European Commission
  • What to do next when you have a VAT number?
    Once the company has the VAT number, it can start doing business in the target country and charge VAT on every sales. VAT returns or declaration for intra-community trade have to be done regularly.
  • How we could help with VAT
    - Provide the best advice on supply and purchase which suits your business needs and growth - warehouse locations / standard of invoices / reverse charge - manage your VAT and customs issues such as VAT returns and intrastat - ensure compliance of regulations - provide training sections to your employees to ensure they are familiar with VAT process within the company - to save time and costs in business expansion on complex international tax rules
  • Difference with EC sales list (ESL) ?
    ESL is usually filled monthly or quarterly and it contains the record of sales and transfer of both goods and services of one VAT registered company in another EU country.
  • What's the VAT credit and VAT debit?
    VAT credit: VAT credit, also known as input VAT credit or input tax credit, is a mechanism that allows businesses to offset the VAT they have paid on purchases or expenses against the VAT they have collected on sales. It helps businesses avoid double taxation and reduces the overall VAT liability. VAT debit: VAT debit, also known as output VAT, is the VAT amount that businesses charge on their sales of goods or services. It represents the VAT liability of the business and is collected from customers on behalf of the tax authorities.
  • What is introduction and Expédition?
    Introduction: In the context of VAT, introduction refers to the movement of goods from one European Union (EU) member state to another. It involves the transfer of goods between EU countries and is subject to VAT regulations specific to intra-EU trade. Introductions typically occur when goods change their location within the EU, such as when they are transported from one EU member state to another. Expédition (Shipment): In the context of VAT, expédition (shipment) refers to the movement of goods from an EU member state to a destination outside the European Union. It involves the exportation of goods from the EU to a non-EU country. Shipment transactions are subject to VAT rules governing exports and may involve customs procedures and documentation to ensure compliance with both VAT and international trade regulations.
  • Does Global Trade Business provide GST services?
    We do! We also offer GST registration and GST return services in Australia and Singapore. The specific requirements for obtaining a GST number can vary depending on the country or region where you are conducting business. Here are some common scenarios where you may need a GST number: Business Registration: When starting a business that is required to collect and remit GST, you typically need to register for a GST number. This applies to businesses that meet the turnover threshold specified by the tax authorities. Threshold Exceedance: Once your business reaches or exceeds the turnover threshold set by the tax authorities, you are required to register for a GST number and start collecting and remitting GST on your taxable supplies. Interstate Trade: If you engage in trade or supply goods or services across different states or regions within a country with a GST system, you may need to obtain a GST number. E-commerce and Online Selling: Many countries have introduced specific rules and regulations for e-commerce businesses. If you sell goods or services online, you may be required to register for a GST number, regardless of your turnover. Import and Export: Some countries require businesses engaged in importing or exporting goods to obtain a GST number for customs and tax purposes. Voluntary Registration: Even if your business does not meet the mandatory registration requirements, you may choose to voluntarily register for a GST number. This can allow you to claim input tax credits on your purchases and avail other benefits provided by the tax system.
  • What is the difference between IOSS and OSS?
    IOSS (Import One-Stop Shop): It is a mechanism for declaring and paying VAT on goods imported from non-European Union (EU) countries. It allows businesses to collect and declare VAT at the time of purchase, simplifying the customs clearance and delivery process for buyers. OSS (One-Stop Shop): This is a regime that enables EU businesses to collect, declare, and pay VAT on sales of goods and services made within the EU. It simplifies tax obligations by allowing businesses to make a single VAT declaration in their Member State of identification, covering all transactions made in other EU Member States.
  • When can IOSS be used?
    If the good is imported to the EU from a non-EU country and the value of the good is less than 150EUR, IOSS can be used. VAT due will be included in the price paid by the customer and VAT on importation will be exempted. However, if the value of the goods is more than 150EUR, traditional VAT will be applied.
  • Where should I register for the OSS?
    To register for your OSS (One-Stop Shop) number, you typically need to go through the tax authority or portal of the European Union (EU) member state in which you are established or have a fixed establishment.
  • Do I need an IOSS if I sell on a marketplace?
    If you sell goods on a marketplace as a non-EU business and the marketplace is considered the deemed supplier for VAT purposes, you may not need to obtain an Import One-Stop Shop (IOSS) number yourself. Instead, the marketplace may handle the IOSS registration and VAT obligations on your behalf. The IOSS allows marketplaces to collect and remit VAT on behalf of sellers for low-value consignments (goods valued at or below €150) imported into the European Union (EU). This simplifies the VAT compliance process for sellers and ensures that the VAT obligations are fulfilled. Generally, if you sell through a marketplace that is registered for IOSS, they may take responsibility for collecting and remitting VAT on the low-value consignments you sell. The marketplace will provide you with the necessary information and documentation to ensure compliance with VAT regulations. It's important to note that the specific arrangements and requirements can vary between marketplaces. Some marketplaces may handle IOSS registration and VAT obligations for sellers, while others may require sellers to handle their own VAT compliance. Therefore, it is advisable to review the terms and conditions or contact the marketplace directly to understand their policies and procedures regarding IOSS and VAT compliance.
  • What is an IOSS intermediary?
    An IOSS (Import One-Stop Shop) intermediary refers to a third-party service provider or agent that assists businesses in fulfilling their IOSS registration and VAT compliance obligations. These intermediaries specialise in helping businesses navigate the IOSS system and ensure compliance with VAT regulations. A business which is established outside of the EU must appoint an intermediary to deal with IOSS.
  • Do i have to get both IOSS and OSS at the same time?
    No, you do not have to get both IOSS (Import One-Stop Shop) and OSS (One-Stop Shop) registrations at the same time. These are separate registration schemes that serve different purposes within the European Union's VAT system. The choice of which registration to pursue depends on your specific business activities and requirements. IOSS Registration: IOSS is primarily used for the distance selling of goods valued at or below €150 to customers in the EU. It simplifies the VAT collection and remittance process by allowing businesses to charge and collect VAT at the point of sale, rather than at the point of importation. IOSS registration is mandatory for businesses outside the EU when they opt to use this system. OSS Registration: OSS, on the other hand, is used for various cross-border B2C (business-to-consumer) supplies of services, as well as for distance sales of goods valued above €150 within the EU. It allows businesses to handle their VAT obligations in a streamlined manner, making a single VAT return and payment in their home member state, rather than registering for VAT in multiple EU member states. Depending on your business model and the nature of your sales, you may need to register for either IOSS or OSS, or both, depending on your specific circumstances.

Talk to one of our experts in order to expand the business in the most efficient way.

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