EU VAT number registration
For companies operating across the European Union (EU), there may be a requirement to register their business with a VAT number in another EU country. The requirements for this vary from country to country, but are based on the EU’s VAT Directive, which should be implemented into local legislation by each member state.
When do companies have to register for an EU VAT number?
As part of efforts to harmonise the European VAT system and support the drive towards an EU single market for goods and services, the requirements to register for a VAT number should be the same in each country. Typical instances where a foreign trader is required to register for a local VAT number include:
- If a foreign company is buying and selling goods in another country
- If a company is importing goods into an EU country, which can include moving goods across national borders within the EU
- Holding goods in warehouses or on consignment stock in other EU countries for customers
- Holding a live conference, exhibition or training if there is paid entrance
- Selling goods to consumers over the internet or through catalogues (distance selling)
- Supply and install of equipment in a limited number of situations
- A very limited number of situations where services are being provided (following the 2010 VAT Package reforms)
The requirements above apply equally to companies from within EU, and non-EU companies. You can review EU VAT rates here.
Generally, non-resident companies must register for VAT immediately. Resident companies’ VAT registration thresholds are here. Another exception is e-commerce companies which have a special distance selling VAT registration threshold regime.
How do companies get a European VAT number?
Once the obligation to VAT register has been established, the process can begin. As a basic, companies must be VAT (EU companies) or tax (non-EU companies) registered. They will then be required to complete and submit a local VAT registration form, along with supporting documentation. The application form will often be in the local language. EU countries have become increasingly reluctant to provide document translations as this can create misunderstandings.
Typically, a company will be required to provide the following supporting documentation:
- Proof of VAT or tax registration in its country of domiciliation
- An original copy of the certificate of incorporation of the company
- A copy of the company’s Articles of Association
- An extract from the national company registrar as proof of existence,
- Increasingly, proof of the planned trade (e.g. contracts or invoices)
- If the company is appointing a local tax agent or Fiscal Representative, then a Letter of Authority or Power of Attorney
Each country will have various other documents that should be supplied. For example, Spain requires a statement confirming that the company does not have a permanent establishment in Spain.
Following the submission of the application, it will take 2-8 weeks to receive a VAT number, depending on the country. The tax authorities may well ask further questions, specifically to try to prevent VAT fraud.
Some countries will not give a full VAT number
Foreign companies looking for a VAT number may face additional requirements in certain countries.
They may be given a local tax number, which only permits VAT transactions on local transactions. This is not registered on the VIES system – see our VIES briefing – and so therefore does not permit intra-community trade.
In this case, additional correspondence is required to get a full VAT number.
What happens after an EU VAT number is received?
Once the company has received the VAT number, it is free to start trading and charging VAT on its foreign transactions.