9 Common Triggers for VAT Registration in the EU

Expanding your business in the European Union (EU) is an exciting step, but it comes with its fair share of responsibilities—particularly when it comes to Value Added Tax (VAT). One of the most critical aspects of VAT compliance is understanding when you are required to register. Failing to do so can result in fines, audits, and reputational damage. Below, we dive deeper into nine of the most common triggers for VAT registration in the EU to help you navigate these requirements effectively.

1. Reaching the distance selling threshold
If you sell goods to consumers in another EU country, VAT registration may be triggered once your sales surpass the annual distance selling threshold. Under the current rules, this threshold is harmonized at €10,000 across all EU member states. Once exceeded, you are required to register and charge VAT at the rate applicable in the customer’s country.
For example, if you operate an e-commerce store and sell products to customers in France, Spain, and Germany, your combined sales to these countries must stay below €10,000 to avoid triggering registration. However, once the threshold is crossed, you will need to start charging VAT in each of these countries.
To streamline this process, it’s worth considering the OSS scheme, which allows you to manage VAT compliance for multiple countries with a single registration, reducing administrative burdens.
2. Establishing a fixed establishment
A fixed establishment is a physical location—such as an office, warehouse, or factory—where your business operates in an EU country. Once you establish a fixed establishment in a country, you are required to register for VAT there.
This trigger is particularly relevant for businesses expanding into new markets or setting up logistics hubs in Europe. Even temporary operations, such as trade show booths or construction sites, can sometimes qualify as a fixed establishment depending on the local VAT laws.
The criteria for what constitutes a fixed establishment can vary between countries, so it’s essential to assess your activities carefully to avoid non-compliance.
3. Cross-border goods movement
Moving goods between EU countries, especially when you’re using fulfillment centers like Amazon’s FBA program, often requires VAT registration. If you store inventory in multiple countries to facilitate faster deliveries, you may need to register in each of these countries where the goods are stored or sold.
For example, if you’re a seller using Amazon’s Pan-European FBA service, storing goods in Germany, France, and Poland could trigger VAT obligations in all three countries.
Many businesses find it challenging to track these obligations, but automated VAT compliance tools, like those offered by Taxually, can simplify the process significantly.
4. Importing goods into the EU
Importing goods into the EU from non-EU countries triggers VAT at the point of entry. The importer of record—whether that’s you, your logistics partner, or your customer—must pay VAT before the goods are cleared for free circulation.
To simplify this process, the EU introduced the Import One-Stop Shop (IOSS) scheme. The IOSS is designed for businesses selling low-value goods (up to €150) directly to EU consumers. It allows sellers to collect VAT at the point of sale, ensuring a smoother import process and eliminating the need for the buyer to pay VAT upon delivery.
If you are an e-commerce business shipping products from outside the EU to customers in the EU, the IOSS lets you include the VAT in your product price and remit it through a single monthly return, avoiding surprises or delays for your customers at customs.
5. B2C sales under the OSS scheme
The One-Stop-Shop (OSS) scheme is designed to simplify VAT compliance for B2C sellers engaging in cross-border transactions. While OSS reduces the need for multiple registrations, it still requires you to register in one EU member state and file periodic VAT returns for all eligible sales across the EU.
If your business is growing and selling to customers in several EU countries, OSS can be a game-changer. However, you must be diligent about tracking sales and ensuring proper classification of transactions.
6. Exceeding local VAT thresholds
In addition to cross-border thresholds, businesses that operate domestically within an EU country must be mindful of local VAT registration thresholds. These thresholds vary widely between countries. For example, in Italy, the threshold is €85,000, while in some other countries, it can be as low as €0, requiring immediate registration from the first sale.
Understanding these thresholds is particularly important if you’re a small business or a startup. If your turnover exceeds the limit, registration is mandatory, even if you’re operating on a small scale.
7. Offering digital services

The EU has specific VAT rules for businesses offering digital services like streaming, e-books, or software to consumers. Under the VAT OSS (One-Stop-Shop) scheme, businesses are required to charge VAT based on the customer’s location, not their own.
For example, a UK-based company selling software subscriptions to EU customers must register for VAT in an EU member state if its services exceed the threshold for VAT liability. This applies even if the company has no physical presence in the EU.
8. Supply of goods under the call-off stock arrangement
Under a call-off stock arrangement, a business transfers goods to a warehouse in another EU country for a specific customer who will purchase them later. In many cases, this triggers VAT registration in the destination country.
While this arrangement simplifies VAT reporting for the buyer, the seller must ensure that all transactions are documented accurately to avoid complications.
Call-off stock arrangements are common for manufacturers or wholesalers operating in multiple EU countries.
9. Involvement in triangular transactions
Triangular transactions occur when three businesses in three different EU countries are involved in a supply chain. While specific simplifications exist, VAT registration may still be necessary for one or more parties depending on how the transaction is structured.
For example, a business in Italy buys goods from a supplier in Germany and sells them to a customer in France. If the goods are shipped directly from Germany to France, this qualifies as a triangular transaction, potentially triggering VAT obligations for the intermediary.
Understanding the rules for simplifications in triangular transactions is crucial to avoid errors.
Conclusion
VAT registration triggers can vary widely depending on your business model, the nature of your transactions, and the countries in which you operate. Staying ahead of these requirements is essential for compliance and long-term growth in the EU market.
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