Even though some aspects of paying VAT and also VAT tax rates in different countries may vary, the main principles have been unified in order to allow the free goods and service market to function.
Among the standardized rules are the rules regarding registration as a VAT taxpayer. Limits, that when exceeded obligated the company to register as VAT taxpayer vary between countries.
In some cases the obligation to register as VAT taxpayer in the EU country appears no matter the size of the transactions.
Such cases include distant sales and trade with excise goods on the EU territory or provision of services to natural persons.
Regarding foreign companies the obligation to register as VAT payer appears when taxable turnover appears on the territory of EU country. Main definitions
Turnover within EU
– export within the unified European market. Obtaining goods within EU
– import of goods within the unified European market.
These definitions do not include sale of goods within one country. Furthermore export/import in context of EU define trade during which goods go over the outside border of EU.
An important difference is that with trading inside EU crossing of borders do not require customs declarations to be filled out (accounting is reflected in the turnover declaration and turnover report), also between countries of Shengen there is no customs control. It is important to note, that some EU members (Cyrpus, Romania and some other Balkan states) are not members of Shengen.Remote sale
- alienation of goods and delivery by its seller or for him by another person, to another EU state to the buyer, which is not registered there for VAT. There is a threshold for distance selling in each EU country, after which an obligation to register as a taxpayer in the buyer's country appears. Until quotas are exceeded, tax is paid in the seller's country. Thresholds for distance trading in different EU countries:
Austria € 35,000
Belgium € 35,000
Bulgaria BGN 70,000
Croatia HRK 270,000
Cyprus € 35,000
Czech Republic CZK 1,140,000
Denmark DKK 280,000
Estonia € 35,000
Finland € 35,000
France € 35,000
Germany € 100,000
Greece € 35,000
Hungary HUF 8,800,000
Ireland € 35,000
Italy € 35,000
Latvia € 35,000
Lithuania € 35,000
Luxembourg € 100,000
Malta € 35,000
Netherlands € 100,000
Poland PLN 160,000
Portugal € 35,000
Romania RON 118,000
Slovakia € 35,000
Slovenia € 35,000
Spain € 35,000
Sweden SEK 320,000
United Kingdom £70,000 Origin: https://ec.europa.eu/taxation_customs/sites/taxati...
NB! NB! These thresholds do not apply to excise goods. When trading excise goods via distant sales the registration as a VAT taxpayer is required no matter the size of the transaction.Triangular transaction
– sale of goods with three participating parties, that are registered as taxpayers in three different EU countries, when the goods are sent directly to the country of the final buyer without going to the country of the reseller.
Reseller in this case does not have the status of a VAT taxpayer in the country where the goods are headed. In such a transaction the final buyer pays VAT in his own country.Non-resident trade
Foreign companies may work on the EU territory without the need to form local companies or branch offices, by registering as VAT taxpayers. This is called non-resident trade.
General requirements for registration of non-residents as VAT taxpayers in EU include:
- Import of goods to the country;
- Organization of events, conferences and so on;
- Storage of goods for resale;
- Purchase and sale of goods in one country for resale in other places;
- Systemic supply of goods and provision of services;
- Distant sales to natural persons, for example, internet based retail sales.
Registration is required for all non-residents of EU, if the buyer is a natural person, if at least one is from EU.VAT for digital services
–MOSS VAT (Mini One Stop Shop)
MOSS is a program that allows for simplified VAT payment system within EU territory when it comes to electronic (digital) services.
This program is not obligatory and is used voluntarily.
MOSS allows to pay VAT in one country when providing services to VAT non-taxpayers from EU by the companies that provide the following services:
- website hosting;
- supply of software;
- access to databases;
- download of music or applications;
- online games;
- distant learning.