EU VAT – Frequently Asked Questions

Here at TBA Global, we’ve helped thousands of businesses like yours register for VAT across the European Union. EU is one of the most popular markets for businesses to get started, and we get asked many questions about the EU VAT process.

Here are the most frequent questions that have reached us.

1. Why should I register for VAT in the EU?

The EU is one of the biggest marketplaces for e-commerce sellers.

Currently consisting of 27 Member States, EU single market rules mean that even if you only register for one EU VAT number, you have access to millions of potential customers. Coupled with the fact that many more customers are now moving online for their shopping needs, it’s never been a better time to get started.

Registering for VAT means that you can store inventory within the EU, improving your shipping lead times, and also improving the customer experience – they won’t face any surprise import charges when ordering from your business.

Many of the most popular online marketplaces such as Amazon will also require you to register for VAT in order to activate their local storefront options.

2. Do I only need to register once?

This depends on how you would like to arrange your business.

EU VAT registration requirements are straightforward – the main rule is that if you want to store inventory in an EU Member State, you’ll need to register for VAT there. For example, if you want to store inventory in Germany, you’ll need to apply for VAT in Germany first.

Once your inventory has been imported into an EU Member State, it can be shipped to customers across the rest of the EU (subject to the distance sales threshold), and your customers won’t face any import charges.

3. What is the distance sales threshold?

Currently, the EU operates a distance selling threshold of €10,000.

This means that businesses who have registered for at least one EU VAT number can sell to other EU Member States without a VAT number at the destination, up to €10,000 in sales.

What happens afterwards?

If you’re already based in the EU, you can register for One-Stop-Shop (OSS) to continue selling. Otherwise, you can also choose to apply for VAT at the destination too.

4. How do I apply for VAT?

There is no centralised VAT registration system. Each Member State operates their own registration system and will have their own requirements.

It’s also important to note that once you’ve registered for VAT in an EU Member State, you’ll have to follow local tax regulations and comply with any ongoing obligations, such as filing timely VAT returns. These obligations will often vary across different Member States.

TBA Global has experience in VAT compliance for many EU regions – get in touch with us for more advice and support.

5. What is the VAT rate in the EU?

There is no centralised VAT rate as each Member State is required to implement their own domestic VAT policies, although any domestic policies must also be compliant with EU regulations.

This means that each Member State will have their own VAT rate. Many of them have also implemented reduced rates for specific categories of goods and/or services. For more information, you can refer to our guidance here.

6. Can I claim back on VAT once I’m registered?

Yes! Registering for VAT will enable you to start making business-to-business (B2B) purchases from other sellers based in the EU.

In order to reclaim VAT paid, the seller you have purchased from also needs to be registered for VAT, and will need to issue you with a valid invoice.

If you’re importing into the EU, you can also reclaim any import VAT paid – the import must be made to a Member State for which you are VAT-registered.

7. How do I check my EU VAT number is valid?

Although there is no centralised registration system, each Member State cooperates with the EU and participates in the VAT Information Exchange System (VIES). This allows the EU to check each national database for VAT registration validity.

The EU VIES checker is a publicly available tool that allows you to check the validity of any EU VAT number at any time.

8. Can I sell in the UK with my EU VAT number?

As of the 31 st January 2020, the UK withdrew from the EU. As the UK opted not to continue participating in EU VAT integration, UK VAT numbers are no longer recognised by the EU (and vice versa).

In order to store inventory in the UK, you will need to apply for a separate UK VAT number. This step is crucial – if you sell from the EU directly into the UK, your customers will be liable to pay import charges.

9. Can I sell in Switzerland with my EU VAT number?

Although Switzerland has extensive trading relation agreements with the EU, it does not participate in the EU customs union, which means that the movement of goods will still be subject to customs clearance.

This means that like the UK, your customers may face import charges if you sell directly from the EU into Switzerland.

10. Can I import into the EU with my VAT number?

Your VAT number will allow you to store inventory, however it is not sufficient to complete the customs clearance process.

As a general rule, each EU Member State will also issue their own Economic Operators Registration and Identification (EORI) number which can be used to facilitate customs clearance. Depending on the Member State, the EORI number may need to be linked with an existing VAT registration.

All EU-issued EORI numbers are valid across all 27 Member States. However, some Member States may have additional importing regulations to comply with.