When a North American company conducts business overseas, a VAT number may be required and VAT registration may have to be in place prior to any international business transaction. EuroVAT specializes in analyzing North American companies VAT status and offer an extensive VAT registration and VAT management program.
When a non-EU company conducts business in Europe, Australia or Japan, VAT registration may be necessary. VAT registration should be done prior to the business event since it might be a legal requirement. Additionally, it might not be possible to receive a possible VAT refund otherwise.
Examples of activities where VAT registration may be required are:
- Organizing of Conferences and Tradeshows
- Drop-shipping - Purchase and sales of goods within the European Union (EU)
- E-commerce - Sales of Digital Services
- E-commerce - Sales of Goods
- Global Contracts where services in Europe are included, such as telecom and network services.
- Imports of Goods to Europe
- Installations and Maintenance contracts
VAT registration means:
- Register for VAT in the European country where the business activity takes place.
- Assess (charge) VAT on all or some of the invoices issued to the customers.
- Reclaim most of the VAT incurred from the European vendors and omports.
- Declare the VAT to the tax authorities through a VAT filing, and pay the difference of the collected and paid VAT.
The basic principle for the VAT system is that VAT should not be a cost to any companies involved in business transaction, and the North American company will at the same time comply with the local tax rules.
Note that in most cases it is not necessary to have an established business/location in Europe in order to register for VAT. It is common for non-EU companies to be registered for VAT in one or more European countries without any presence and without any other international tax consequences. However, this has to be confirmed from case to case.
The VAT rules are very complex and vary from country to country. Please contact our VAT experts directly for the details related to your company’s international business activities and related VAT issues.