Not sure where to start when it comes to VAT Registration? If you have a VAT obligation, you’ll need to register for VAT in one or more countries. We outline everything you need to ensure full compliance.
Where you have a VAT registration obligation
That sounds obvious enough, but pinning down exactly where you need to register for VAT can be trickier than it seems. For example, if you sell digital services or your business is a multinational enterprise, you probably have customers all over the world. And if you meet the sales threshold in those countries, you will need to register for VAT. In the case of digital services, you’ll need clarity on whether your specific digital product is eligible for digital services VAT in each given location. And in the case of multinational enterprises, you’ll need to know if your local offices are offering taxable goods or services. In both these examples, a sales threshold exists which determines when it is time to VAT register. if you exceed that threshold, your business must register for VAT.
If you are obliged to appoint a VAT agent
In some jurisdictions, companies are permitted to manage their relationship with the local tax office directly. However, certain countries require a fiscal representative to be appointed under certain conditions.
Deadlines and filing requirements
VAT compliance isn’t a one-off thing, it means ongoing compliance. In other words, each jurisdiction in which VAT registration occurs will have different deadlines and filing requirements.
How to ensure VAT registration deadlines are met
Understanding the various filing deadlines is one thing. Staying on top of them all is another. Without effective systems to ensure all deadlines are met, the risk of accidental noncompliance is high.
When e-invoicing is mandatory
Some jurisdictions now require all filing to be done electronically. This is increasingly becoming the norm. In such cases, a company needs the technology to meet those requirements.
How to keep effective records
Tax authorities will require records of all relevant invoices and other record-keeping. If a business does not have effective record-keeping processes in place, the risk of noncompliance is high.
The cost of noncompliance
Any failure to properly comply with local VAT regulations – intentional or accidental – can result in severe penalties. For many businesses, the shock to cash flow can be ruinous.
In addition, tax authorities may take measures such as extended audits on any noncompliant company, which is time-consuming, potentially costly and risks further penalties for historic inconsistencies in VAT filing.
The value of automation
Manual VAT compliance is sometimes possible – but it’s not desirable. Automation reduces the tedium, eliminates human error and enables employees to focus on their core business roles.
How to go beyond compliance
As should be clear by now, meeting all your obligations is essential. The risks of noncompliance are simply too high. However, a deep understanding of global VAT regulations can help businesses take advantage of incentives and further financial goals. Expert VAT advice should therefore be a strategic business priority.
10. The benefits of a centralised VAT registration solution
Communicating with multiple VAT agents or tax offices all over the world is time-consuming and makes oversights and miscommunication more likely.
A complete VAT Registration and Compliance Solution
Vatglobal designed our proprietary VAT technology based on a decade’s experience helping global businesses manage compliance. Powerful automation ensures that you never miss a deadline and that filing is always complete and accurate.
A single point of contact for your global VAT compliance needs, Vatglobal’s expert team is available to provide guidance on all VAT registration and compliance issues and help make informed business decisions.
Get in touch with Vatglobal for a complete solution to global VAT registration and compliance.