How to Register for VAT in the EU

In short: To register for VAT in the EU, you check if you must register and gather your documents. Then you file the local form with each country's tax authority. EU businesses must charge VAT in their customers' countries once cross-border sales pass €10,000 a year. The OSS and IOSS schemes can cut the number of registrations you need.

The rules on registering for VAT in the EU can be complex. Whether they apply to your business depends on several factors. These include what you sell, where your customer is, and the value of your sales.

When do you need to register for VAT in the EU?

If you sell goods or services to customers in the EU, you may need to register for VAT in some Member States. Since July 2021, an EU-wide distance-selling VAT threshold of €10,000 in taxable sales has applied.

The €10,000 threshold is your total cross-border sales to consumers in all other EU countries combined. It only applies if your business is set up in a single EU country. Once you pass it, you must charge VAT in your customers' countries. You then register in each country or use the OSS.

If your business is not based in the EU, the threshold does not apply. VAT can be due from your first sale. You'll also likely have to appoint a fiscal representative.

You must send VAT returns to the relevant tax authority on a regular basis, usually monthly or quarterly. Each VAT return shows the VAT you charged and paid in the period. If you're registered for VAT in more than one Member State, you file a separate VAT return for each country.

It's important to follow the VAT rules in the EU. If you don't, you can face penalties and fines. VAT-registered businesses must keep accurate records of their sales and purchases. They must charge and pay the right amount of VAT. They must also issue VAT invoices that meet the rules of each Member State.

Can you register for VAT voluntarily?

Yes, you can choose to register for VAT voluntarily, even if your turnover is below the compulsory threshold. Many businesses must register because their turnover passes that threshold. Others register by choice. Voluntary VAT registration can be a smart move if you want to improve your finances and your standing in the market. Related reading: Backdating VAT Registration: What You Need to Know.

What are the benefits of voluntary VAT registration?

• Reclaim VAT on purchases – Claim back VAT on goods and services to cut costs and boost profits. This helps most if your business has large expenses.
• Enhanced credibility – Being VAT registered can boost your name with customers and suppliers. It shows you are established and trustworthy. This may help when you work with larger clients or enter new markets.
• Better financial insight – Detailed VAT records give you useful data to run your business. They help with planning, decisions, and tracking your taxable turnover.
• Claim VAT on pre-registration purchases – You may be able to reclaim VAT on eligible items bought before you registered. This is useful if you spent a lot before registering.

What are the drawbacks of voluntary VAT registration?

• Higher prices for some customers – Charging VAT may make your products or services cost more for customers who are not VAT registered. This can hurt your competitiveness.
• Increased administration – You must file regular VAT returns and keep careful records. This adds to your workload and costs.

Bottom line – Voluntary VAT registration can save you money, build trust in the market, and give you more control of your finances. But you should weigh these benefits against the extra costs and duties.

How do you register for VAT in the EU?

To register for VAT in the EU, you follow a similar set of steps in each country. Each EU country has its own VAT registration requirements. But in general, the steps below apply to any business that wants to register for VAT in the EU.

Do you need to register for VAT?

First, find out if you need to register for VAT. In most cases, EU businesses whose cross-border sales to consumers pass €10,000 must register or use the OSS. Businesses based outside the EU usually need to register from their first taxable sale.

You need to know how much VAT to charge and pay. This keeps you compliant and your reports accurate.

What documents do you need?

Once you know where you must register for VAT, gather the required documents. These usually include your business registration papers, proof of identity, and proof of address. Some countries may ask for extra documents.

How do you complete the VAT registration form?

Next, fill in the local VAT registration form. It asks for details about your business, such as your business name, address, and tax identification number. You'll also need to give details about your supplies and your turnover. In most cases, you must fill in the form in the local language. Once approved, you'll get a VAT registration number.

How do you submit the VAT registration form?

You submit the completed form to the local tax authority in the country where you're registering. Depending on the country, you send it online or in person. Make sure your VAT registration is accurate to avoid delays in approval.

How long does it take to get an EU VAT registration number?

Getting an EU VAT number can take anywhere from a few days to several weeks. An EU VAT number is also called an intra-community VAT number or VAT ID. You must wait for it after you submit your form. The process and timings vary widely from country to country.

When can you start charging VAT?

You can start charging VAT on your sales once you've received your EU VAT number. You'll also need to send regular VAT returns to the local tax authority. These report your VAT transactions for each period. You can also read All You Need to Know About the P IVA Number Italy.

What is an intra-community VAT number?

An intra-community VAT number is a unique ID number for businesses in the European Union (EU) that supply goods or services across EU borders.

The intra-community VAT number lets businesses trade freely within the EU without paying VAT twice. It helps EU tax authorities identify and track trade between Member States. It also makes it easier to bill and collect VAT.

Once registered, you can include your intra-community VAT number on invoices and other official papers for your cross-border trade within the EU.

What are the One Stop Shop (OSS) and Import One Stop Shop (IOSS)?

The OSS and IOSS are two EU schemes that make VAT simpler for businesses selling across EU borders. The EU brought them in in July 2021: the One Stop Shop (OSS) and the Import One Stop Shop (IOSS). Both aim to cut the need for many VAT registrations in different Member States.

One Stop Shop (OSS)

The One Stop Shop (OSS) is open to EU and non-EU businesses selling goods or certain digital services to consumers in other EU countries. You don't need to register for VAT in every country where your customers are. Instead, you register for the OSS in one Member State. You then report all qualifying EU sales in one quarterly VAT return. We cover this in more detail in Understanding Common EU Returns: Intrastat, ESL, VAT, OSS & IOSS Explained.

With the OSS, you only need to:

• Register once for VAT under the OSS scheme in one EU country.
  
• File a single OSS VAT return covering all distance sales within the EU.
  
• Pay the VAT due in one central payment, which is then shared out to the right Member States.

This greatly cuts your paperwork and helps you follow local VAT rules across the EU.

Import One Stop Shop (IOSS)

The IOSS applies to distance sales of low-value goods (under €150) imported into the EU. It lets you collect VAT at the point of sale. This means your customers won't face surprise VAT charges when their order arrives.

Key benefits of the IOSS include:

• A simpler way to collect, declare, and pay VAT on imported goods.
  
• A better customer experience, with no delays or extra charges at customs.
  
• Only one IOSS registration is needed to sell to consumers across the entire EU.

Both the OSS and IOSS are optional. But they can be very useful for e-commerce businesses that sell across EU borders or import goods into the bloc. Signing up for one or both can save time, reduce compliance work, and keep customers happy.

What should you remember about EU VAT registration?

VAT is an important tax that applies to most goods and services in the EU. If you're registered for VAT, you must follow the rules. That means charging and paying the right amount of VAT, filing VAT returns on time, and keeping accurate records. You also need to know how VAT rules differ from income tax duties, as you must manage both.

Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.

How Taxually handles this

Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.

Related guides

• Is Voluntary VAT Registration Right for Your Business?
• Backdating VAT Registration: What You Need to Know
• Everything You Need to Know About Single VAT Registration