VAT registrations in Europe

Under certain circumstances, online retailers in Europe require a VAT ID. This is obtained through a VAT registration. However, VAT registrations in Europe are usually not only necessary for online shop operators and Amazon sellers in their home countries. In the following article, you will learn when and where to register, how to complete a VAT registration, what the OSS has to do with VAT registrations, and where to find further information.

VAT registrations are required in many situations in Europe. First of all, every online seller receives a VAT number in their home country, the country of incorporation, when they set up their business. But also in other EU countries, VAT IDs and thus VAT registrations are often necessary, if you

• store abroad or
• sell to foreign private customers.

By the way, as soon as you have registered for VAT, you will have to deal with other tasks, at home and also abroad. For example, you have to submit VAT returns in Europe on a regular basis – often on different dates and in the local language. Sound complicated? Do not worry! The hellotax VAT software monitors all appointments and to-do’s for you, while our team of local tax consultants takes care of your VAT registrations, the submission of VAT returns, and contact with the authorities. Contact us today and learn how we can automate your VAT obligations in Europe so you can stay focused on your business.

What does a European VAT Identification Number (VAT ID) look like?

A VAT ID in Europe consists of a country code (e.g. FR in France) and a sequence of numbers. The sequence of numbers often corresponds to a different tax number in the respective country, for example, the tax number.

In the following article, you will find out what the VAT identification numbers in the countries of the EU specifically look like. We will also explain to you exactly which documents you need for registration, give you examples and inform you about country-specific specialties and exceptions.

Countries	Registration
VAT Registration Spain	Register for VAT now
VAT Registration Germany	Register for VAT now
VAT Registration Italy	Register for VAT now
VAT Registration France	Register for VAT now
VAT Registration Austria	Register for VAT now
VAT Registration Czech Republic	Register for VAT now
VAT Registration Poland	Register for VAT now
VAT Registration Netherlands	Register for VAT now

Who needs to register for VAT?

In Europe, every businessperson must register for VAT in at least one country: namely in their home country. However, this is usually not enough for online shop operators, Amazon sellers, and other mail order companies. They must also register for VAT abroad.

When do I need a VAT registration abroad?

Storage abroad

The first reason that leads to VAT liability abroad is quickly explained. As soon as you store goods abroad, you are obliged to complete a VAT registration in that country. Incidentally, this also applies in non-European countries. After you have registered for VAT with the responsible tax authorities, you will receive a foreign VAT identification number after a waiting period. This is required to rent storage space and to pay foreign employees to run the warehouse. 

Caution: It is not only the independent storage of products in other EU countries that leads to a necessity of completing a foreign VAT registration for online retailers. Many sellers use e-fulfillment programs or Amazon FBA. In both cases, fulfillment providers – either Amazon or third parties – are commissioned to store and deliver the goods to the end customer. These service providers often operate warehouse stores abroad in order to guarantee fast delivery times to end customers. Amazon for example runs storage spaces in almost all European countries.

As soon as the goods and products of an online retailer are stored in a foreign EU country the retailer must register for VAT abroad, even if the storage is carried out by the commissioned service provider. This VAT snag is often overlooked.

Sales to foreign private customers

The second reason for having to register for VAT in other EU countries is revenue through transactions with foreign private customers. More precisely, the net turnover from cross-border distance selling.

The previous situation: Until July 2021, each European country set its own VAT thresholds for mail order and distance selling. In Spain, for example, this delivery threshold was €35,000, while in the Netherlands it was set at €100,000. As soon as the net turnover from sales to Spanish or Dutch private customers exceeded these limits, online retailers had to register for VAT in Spain or the Netherlands and obtain a VAT number. This means that although sellers monitored several delivery thresholds at the same time, they only had to register for VAT in countries one after another since each country was considered individually.

All sales before exceeding the delivery threshold were treated as domestic sales, subject to the domestic VAT rates, and included in the domestic VAT returns. As soon as the delivery threshold was exceeded, the respective foreign VAT rates were used and sellers had to submit regular foreign VAT returns.

The current changes: In July 2021, the country-specific delivery thresholds were replaced by an EU-wide delivery threshold of just €10,000. First of all, this delivery threshold is significantly lower than the previous ones. It is also achieved through all cross-border sales within the EU together, e.g. through transactions with Spanish AND Dutch customers combined. The threshold is, therefore, crossed much faster by transnational online sellers than the previous thresholds.

Before crossing the threshold, cross-border deliveries are still treated as national transactions. However, once sales through this type of trajectory reach the limit, online merchants must apply for a VAT number in all countries where they sell and register for VAT accordingly.

Good to know: Cross-border sales to foreign European business customers generally have no effect on the VAT registration obligation in Europe. That’s because VAT for these transactions is processed within the EU using the reverse charge mechanism. Therefore, no VAT registration is required.

How does VAT registration work in Europe?

In your home country, registration for VAT is usually done quickly or even automatically. First of all, you have to start a business. When you set up your company, it is already registered for VAT in most countries and you will automatically receive a VAT number. If not, you can easily apply to the tax authorities in your language using your company’s identification number.

The situation is different abroad. First, you need to identify the relevant tax authority and find the VAT registration application, which is usually only available in the local language. These applications are nowadays available online in most EU countries, although registration for the respective platform of the tax authorities is often necessary and there are exceptions. Documents such as excerpts from the national commercial register and proof of VAT registration in the home country, identification documents, and notarial certifications must also be attached to the application because your company is not yet known to the authorities abroad.

Not sure if you can successfully navigate VAT registrations in different countries and languages? Then hellotax can help you. As soon as you send us your data, we take care of translations and certifications and can register you for VAT in any EU country of your choice quickly, easily, and at any time. You can find out more about this service during a free consultation with our EU VAT experts.

The only waiting time you have to deal with is due to the authorities processing it. As soon as the tax office has processed your application, you will receive your brand new VAT ID from us, because we also receive and translate your tax letters for you.

What does the EU One Stop Shop (OSS) have to do with VAT registrations?

If you are dealing with the topic of VAT in Europe, you will certainly have heard of the One-Stop-Shop. This procedure was introduced on July 1, 2021 and makes it easier for online sellers to fulfill the VAT obligations that have arisen as a result of the new EU-wide delivery threshold.

As soon as you register for the One-Stop-Shop, every cross-border sale – even the first one – is subject to the respective country-specific VAT rates, since the delivery threshold regulation no longer applies. However, VAT registration is no longer required for cross-border distance selling. Instead, these transactions are listed in an OSS summary report and the total VAT liability is paid to the domestic tax office, which then redistributes the amounts to the foreign authorities based on the OSS report.

Even if the OSS replaces VAT registrations abroad, there are still some difficulties online sellers need to deal with. On the one hand, compiling an OSS report is complicated because all transactions have to be sorted by country of origin and destination and by VAT rates. Furthermore, the OSS is not applicable if products are stored in other EU countries. Then online sellers must either decide against the One-Stop-Shop or manage the OSS and foreign VAT returns at the same time.

hellotax can also help here. Our tax experts will be happy to show you all the options and advise you. We can also take care of your OSS registration and create and submit your OSS reports. Contact us today!