If your business is operating or selling goods to EU member states, you are obligated to apply for an EU VAT number registration. Furthermore, depending on the services or goods you sell, you may also need to register in multiple EU member states. The registration requirements vary from country to country but all follow the general direction of the European VAT directive. This guide will help any non-EU businesses to determine whether they need an EU VAT number registration and how to go about the process.
What is an EU VAT number?
An EU VAT number is also referred to as a VAT registration number. A VAT authority assigns a unique VAT number to a taxable business or non-taxable entity. This number identifies a taxable person (business) or non-taxable legal entity.
Which companies need to seek an EU VAT number registration?
Any business carrying out economic activity in an EU member state will require a VAT number. Specifically, the following activities require a VAT registration: Most businesses (and other persons carrying out an economic activity) need a VAT number (see Article 214 VAT Directive for full details).
In particular, businesses must register for VAT in the following cases, when it:
- carries out the supply of goods or services taxed with VAT;
- makes an intra-EU acquisition of goods;
- receives services for which it is liable to pay VAT.
- supplies services for which the customer is liable to pay VAT.
Can you use the same VAT number for multiple EU Member states?
Simply put, no. But the answer depends on the nature of your business. One EU VAT number cannot be used for several EU Member states and that you might be liable to get an EU VAT number registration in a few EU member states.
For digital services businesses and e-commerce, the EU commission has tried to simplify the VAT process by introducing the VAT mini one-stop-shop (VAT MOSS) which allows a company supplying broadcasting, electronic/digital and telecommunications services to register file and report for their VAT using one EU VAT number. That particular EU member state will be responsible for distributing the VAT revenue to other states.
What is the registration process for acquiring an EU VAT number?
Once your business has determined that it requires a VAT registration, you can begin your registration process. The process will require the following:
A registration application form: You will be required to complete an application for the country in which you need to register.
Supporting Documents: You will need to provide various company documents such as local tax certificates, incorporation, registrar, proof of EU trade and a letter of authority from your fiscal representative (if appointed – many EU countries require it).
Local language required: Communication and application forms will need to be done in the local language. This makes it easier to process for the VAT authority despite it being more difficult for the non-resident company.
How Long does it take to get an EU VAT Number?
Depending on the country, it can take anywhere between 2 weeks to 2 months to receive your VAT number. Furthermore, there may be extra queries and requirements within your registration process.
After Registration: Using your EU VAT number registration to report your VAT
With your newly acquired EU VAT number registration, your company is free to start charging VAT on your foreign transactions. You will also be obligated to file & report on that VAT by completing regular VAT returns with your local VAT authority.
Vatglobal provides extensive EU VAT registration, compliance and filing support. Speak to one of our consultants today to discuss your EU VAT compliance needs.