Businesses who provide goods or services in a foreign jurisdiction with a VAT regime must comply with the relevant VAT laws of that country. There are several cases where it will be a legal obligation for a company to register for VAT in the country because they are undertaking taxable business activity.
Such activity includes:
- Importing goods into the country for sale or distribution
- Buying and selling goods locally
- Selling goods to individuals over the internet (revenue thresholds may apply)
- Storing goods in a warehouse, as consignment stock or in a fulfilment centre
- Organising an event in the country (specifically if there is paid admission to the event)
It is the company’s responsibility to register for VAT prior to commencing taxable transactions and once registered, one must comply with the compliance and reporting requirements.