Updated on June 1, 2022
A VAT number in another EU country may be required if you’re doing business across the EU.
A VAT number may be required in another EU country if a company is operating throughout the European Union (EU). This varies from nation to country, but is based on the EU’s VAT Directive, which each member state is expected to integrate into their own laws.
When do companies have to register for an EU VAT number?
For the sake of unifying the European Union’s single market for goods and services, the procedures for obtaining a VAT number should be uniform across all member states. The following are typical scenarios in which a foreign trader must obtain a local VAT number:
It is possible for foreign companies to conduct business in another country.
Companies that move goods across national borders within the EU as well as into EU countries must comply with EU regulations when doing so.
storing products in storage facilities or consignment stocks in other EU countries on behalf of clients
Incorporating a live event into an exhibition, conference, or training that charges admission
Internet sales and catalogues are two methods of marketing things to consumers (distance selling)
Installation of equipment in a limited set of circumstances.
Very few circumstances in which services are being rendered (following the 2010 VAT Package reforms)
Companies based in the EU and those based outside the EU are subject to the same set of requirements. Here, you can see all of the EU VAT rates.
As a general rule, non-resident businesses are required to register for VAT as soon as they are established. The VAT registration thresholds for local businesses have been reached. E-commerce enterprises are a further exception, as they are subject to a lower distance selling VAT registration threshold.
How do companies get a European VAT number?
The process can begin once the necessity to register for VAT is confirmed. Firms must be VAT (EU companies) or tax (non-EU companies) registered as a bare minimum to do business. A local VAT registration form and associated documentation must be filled out and submitted by them at that point. There is a good chance that the application will be in the native tongue of the applicant. EU countries have become increasingly wary of providing translations of documents, fearing that they could lead to misinterpretations of the content.
Supporting paperwork commonly requested from a business includes the following:
A copy of the country’s VAT or tax registration documentation
The company’s initial certificate of formation.
Copy of the Articles of Association for the business
It is becoming increasingly common for companies to use an extract from the national company registry as confirmation of their status as a legal entity (e.g. contracts or invoices)
To authorise a local tax agent or fiscal representative, an authority letter or power of attorney must be used.
Each country will require a different set of documentation. A statement stating that the corporation does not have a permanent establishment in Spain, for example, is required by Spain’s law.
Depending on the country, it can take anywhere from two weeks to eight weeks to get a VAT number after submitting an application. For the sake of preventing VAT fraud, the tax authorities may inquire further about your finances.
Some countries will not give a full VAT number
Certain nations may have additional criteria for foreign companies seeking a VAT number.
Taxpayers may receive a local tax number, which exclusively authorises local VAT transactions. Intercommunity trading is prohibited because this is not registered in the VIES system (see our VIES warning).
To obtain a complete VAT number, more correspondence is necessary in this instance.
What happens after an EU VAT number is received?
It is possible for a corporation to begin trading and charging VAT on its international transactions once it has got its VAT number.
You may learn more about the different number forms used by the EU member states in our briefing on EU VAT number formats.
It must now abide by EU VAT Compliance requirements and submit regular EU VAT Returns; you may find our briefings on these topics helpful.