When do you need an eu vat number?

Every company extending their activity abroad must consider the need for a VAT registration. Even when the business is not setting up a branch or having any physical presence in the country, a VAT registration may be required.

As a general rule, you need to register for VAT in a country when you are performing taxable transactions in that territory. There are special VAT rules for e-commerce businesses which you can read in our article VAT on drop-shipping. E-commerce VAT. For every other business without a permanent establishment, these are some of the transactions that will oblige you to register for VAT in a country:

Imports: If you import goods into a country, you need to register and pay VAT and customs duties at the border. There are many simplifications around importation, but as a general rule you will need a VAT number if you want to import goods and sell them in any given EU country.

Exports: Exporting goods will also oblige you to register and comply with all documentation requirements in order to zero rate your supply.

Domestic sales of goods: Selling goods within a country would normally oblige you to register and pay VAT to the tax authorities on those sales. However, foreign companies need to consider reverse charge rules. When reverse charge applies, you do not charge VAT on the supply and the customer manually calculates the VAT in its VAT return. In those cases, a domestic sales of goods does not require you to register. Contact us if you want to know if reverse charge applies in any country (or if this whole paragraph sounds like Chinese).

Intra-Community movements: When you supply goods from one EU country to another or when you receive goods sent from another EU country, you need to get a VAT number. You also need to get registered in the VIES system, which is automatic in some countries but it can take time and efforts in other member states.

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