VAT registration in the EU

About VAT registration in the EU

VAT registration in a foreign country is often a necessary and difficult task. Foreign entities, regardless of the legal form of the company, must meet complex documentation requirements and follow local procedures. Understanding local regulations, language and culture is essential for successful registration and obtaining a VAT (EU VAT) certificate. Few companies have the in-house expertise to handle foreign VAT registrations and settlements. Choosing EFF is a natural step to avoid problems and unnecessary costs when it comes to VAT compliance.

International VAT registration can apply to companies that:

• sell goods or services over the Internet to individuals and institutional entities
• have or intend to open warehouses in other countries
• ship goods to individuals through local sorting and storage facilities
• ship machines to various countries (with installation services)
• sell tickets for conferences
• provide real estate services

Deregistration from VAT in EU countries

If a VAT-registered company in an EU country ceases to conduct EU transactions or changes its sales model, the entrepreneur is obliged to notify the local Tax Office, which, after analyzing the documentation and tax settlements, may decide to deregister the entity from the national active business register. Such a scenario can take place at the request of the entrepreneur, but also at the initiative of the local Tax Office, if the institution notes a long-term lack of sales and any other activity, or in the case of persistent non-compliance with tax law, including payment of VAT financial obligations. Some EU countries have a minimum period for remaining an active VAT taxpayer after successful registration, which is why in some scenarios we recommend our clients to submit zero-rated VAT returns – NIL – until this period expires. Naturally, the deregistration process will not be completed if the Tax Authority has doubts about previous tax returns, is awaiting payment of outstanding VAT, or a tax audit is underway. The process can be convoluted, especially due to cultural differences and language barriers, which is why, as Duni EFF, we support our clients through the process, with a particular focus on advising if and when deregistration will be most effective.