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When am I obligated to register for VAT?

In short, this depends on what activity you undertake in the country, usually you may be required to register if you perform taxable supplies of goods or services in the respective jurisdiction, i.e. (but not limited to, please note that this is also subject to local rules):

  • You perform supply of goods or services to other businesses established in the relevant jurisdiction exceeding a set threshold as set out in the rules of the relevant jurisdiction. If the customer shall self-account the VAT in accordance with domestic laws, you are usually not obligated to register although the threshold is exceeded.
  • You perform supply of goods or services to consumers resident in the relevant jurisdiction exceeding a set threshold (in accordance to the domestic laws of the relevant jurisdiction).

If you are registered, you are usually required to report and pay VAT to the relevant local authorities. In addition, a local VAT representative may be required (please refer to the details for various countries below updated as of February 2021). Due to local variances in different countries, the obligation to register and obligations following the registration should be confirmed by a local advisor.

For supplies within EU

Generally, you can have an obligation to register in an EU Member State although you are not established (e.g. through a local company or a local branch) in the relevant EU Member State. Usually this applies if you perform taxable supplies of goods or services to the EU Member State exceeding a certain threshold. The specific requirements vary across EU Member States, thus the VAT registration obligation should be confirmed in each country. Note that a local VAT representative may need to be appointed. EU businesses that register for VAT in other EU countries generally do not have the obligation to appoint a VAT representative. However, in case the EU VAT registration is obtained by non-EU businesses, most EU countries would request a local VAT representative. Some EU countries can potentially allow VAT registration without a representative for non-EU companies, however that should be confirmed for each case.


Examples of when you may be required to register, assuming that you perform taxable supplies exceeding a set threshold:

  • You perform the sale of goods locally to business customers established within the EU Member State. Note that in some EU Member States a domestic VAT reverse charge rule applies, where the recipient must self-assess VAT. If domestic VAT reverse charge applies, you will not have an obligation to register for VAT.
  • You perform the sale of goods locally to consumers resident within the EU Member State.
  • You acquire goods from another EU Member State. In this case you are typically obligated to register for VAT in the EU Member State at the arrival of the goods.
  • You perform “distance sales” of goods to consumers. A “distance sale” is a sale of goods shipped from the supplier in one Member State to a consumer in another Member State. If the total value of supplies by a distance seller to customers in another Member State exceeds a certain turnover threshold, the distance seller must register for VAT in that other Member State. Note that from 1 July 2021, EU VAT obligations will be simplified for companies carrying out online cross-border sales of goods to EU private customers.

For more information see: https://assets.ey.com/content/dam/ey-sites/ey-com/en_be/topics/e-commerce-new/e-commerce-vat-rules/ey-e-commerce-vat-package.pdf


UK

Non-UK businesses must register for VAT in the UK if they make any taxable supplies in the UK (e.g. taxable sales of products in the UK), regardless of their value. No VAT representative is currently required for EU or non-EU businesses that register for UK VAT.

For more information see: https://www.gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat/vat-notice-7001-should-i-be-registered-for-vat#Taxable-supplies

Norway

Non-Norwegian businesses are liable to register for VAT in Norway if they make taxable sales in Norway exceeding NOK 50,000 during a twelve-month period. A VAT representative is not required for the businesses resident in Belgium, Denmark, Finland, France, Iceland, Ireland, Italy, Luxembourg, Malta, The Netherlands, Poland, Portugal, Slovenia, Spain, Sweden, Germany, Czech Republic, Bulgaria, Estonia, Greece, Croatia, Cyprus, Latvia, Lithuania, Romania, Slovakia, Hungary and Austria. The businesses resident in the other countries would be requested to appoint a VAT representative in Norway.

For more information see: https://www.skatteetaten.no/en/business-and-organisation/vat-and-duties/vat/register/

Switzerland

Non-Swiss businesses that perform supplies of goods in Switzerland must register for VAT if they are required to account for Swiss VAT on the supplies (if the global turnover exceeds CHF100,000). A non-Swiss business must appoint a tax representative if it supplies goods or services subject to Swiss VAT.

Australia

GST applies to taxable supplies and to taxable importations made by non-residents. In general, a nonresident entity is not required to appoint a tax or fiscal representative in Australia for GST purposes. However, GST payable on any taxable supply or taxable importation made by a nonresident through a resident agent is payable by the agent. The non-resident is still required to be registered for GST but need not submit GST returns if all supplies or acquisitions are made through the agent. As an alternative to registration, some non-residents may agree with the recipient of the supply for the recipient to account for the GST liability under the voluntary reverse-charge procedure.

For more information see: https://www.ato.gov.au/business/international-tax-for-business/in-detail/doing-business-in-australia/australian-gst-registration-for-non-residents/

New Zealand

A foreign or non-established business must register for GST if it makes taxable supplies in New Zealand that exceed NZD60,000 in any 12-month period. A non-established business may also register for GST voluntarily if its supplies are below the annual registration threshold. A non-established business that does not make taxable supplies in New Zealand may register for GST, in order to recover GST incurred in New Zealand. A foreign business is not required to appoint a New Zealand resident GST representative in order to register for GST.

For more information see: https://www.ird.govt.nz/gst/registering-for-gst

 

Important: Gelato is not a financial or tax advisor, therefore the above regulation is written by Gelato’s tax advisor EY. EY (Ernst & Young Advokatfirma AS) is a leading provider of indirect tax, VAT and customs services. Should you have any queries pertaining to this, you may seek advice from EY. You will have to enter into a separate agreement with EY for the provision of such services

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