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Fiscal Representation

When goods are brought into the EU, duties and VAT will be due from the importer of record, who requires an EORI number. Businesses must consider the structure of their imports.

For companies providing goods or services in foreign European countries, there may be a requirement to VAT register as a non-resident VAT trader. Many countries permit the foreign company to register ‘directly’ with the tax office, without having to appoint a local representative.

However, under certain circumstances, the tax authorities will requires the company to appoint a Fiscal Representative in the destination country.  This company must be tax registered and willing to act as the local representative of the company, managing with queries and filing obligations of the company for dealings with the tax authorities. The fiscal representative may be jointly liable for all VAT payments of the company.

Most companies who offer VAT services for companies will not act as a fiscal representative. This means you might be forced to find 3rd party companies in addition to the VAT agent. In some cases, the company will only represent you if you establish an EU business (which comes with several other unnecessary complications). Vatglobal will act as fiscal rep on your behalf in all EU countries where required.

The tax authorities regard a fiscal representative as the local agent of the foreign trader – which leads to several compliance obligations. Additionally, since the fiscal rep is jointly liable for the trader’s taxes, it is industry practice to require a security deposit or bank guarantee in favour of the fiscal representative to mitigate against potential risks if the company reneges of any liabilities.

Since Vatglobal is jointly and severally liable for all VAT payments to the tax office, it is possible that we will require some form of security to mitigate the risks associated with this. The security can be in the form of a bank guarantee or cash deposit and will be calculated based on estimated taxable turnover data. This will not be required for all jurisdictions and business models, but might be required under certain circumstances. Contact us for more details.

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