Are you struggling to manage EU VAT compliance filings?
Ryan Bevan 14 April 2016 No comments
Engaging a VAT tax representative to manage EU VAT compliance filings could be the answer for your business
For many non-EU businesses starting to trade in the EU can be a minefield. One of the most daunting issues to contend with is understanding the complex tax rules, especially the VAT rules and regulations which in many cases will apply from the very first sale made.
In almost all EU countries a nil (£0) VAT registration threshold applies to foreign businesses (i.e. a business that is not incorporated in that country, e.g. a US incorporated business making sales in the UK). This means that a VAT registration must be applied for as soon as trading commences, even if the sale value is only £1, €1 or $1.
In order to sell their goods or services to an EU customer, the business therefore needs to know:
- the VAT rate or liability of the supplies it makes,
- what the VAT invoicing requirements are, and
- how and when to complete the VAT Return.
Not only that, the VAT rules vary from one EU country to another! So the more EU countries the business sells into the more rules and regulations there are to master. Not to mention the VAT reporting deadlines needing to be met too.
One way to make this whole process simpler could be to appoint a tax or fiscal representative in each country.
A tax representative is responsible for:
- keeping the VAT records and VAT accounts,
- accounting for VAT on the business’ behalf, and
- is jointly and severally liable for any VAT debts incurred.
Whilst in the UK it is optional for a foreign business to engage a tax representative, it is compulsory in some EU countries.
If you want to find out more about these requirements or for more information on how to meet European VAT filing deadlines, please get in touch with one of our VAT experts.