Once your business starts making taxable supplies in a country you may trigger the need to register for VAT in that country. Once registered, you are required to submit VAT returns and pay the VAT due on sales by certain deadlines which vary between each country. Depending on the country you are looking to register in, the returns could be monthly or quarterly filings with an annual VAT return usually also required in some countries. If you should have been VAT registered from a certain date in the past before you opted to register (for example you started storing goods in Germany but didn’t register for a few months after this date) you will be required to file retroactive (backdated) returns. We can help with this.
Members of the EU must apply the principle ‘standard’ VAT rate of at least 15%; although all countries are now above this minimum. See all EU VAT rates here. There is no restriction on the maximum rate, with the highest currently being 27% VAT. Countries may also apply two reduced rates for goods and this must be at least 5% and above. The types of goods which may benefit from the reduced rates are provided within the Directive. Countries may also apply other rates in force at the date of their accession into the European Union.
There are a range of scenarios and goods or services for which VAT is not charged. In some situations (VAT Exempt), companies may not recover the input VAT incurred when buying goods or services to be incorporated into their final product. For example: financial services, property-related and international air transport. In other cases, the company may be able to recover the VAT (Nil VAT). For example: medical supplies, children’s clothing, education, food and books.
The EU VAT Directive provides extensive guidance on what input VAT is deemed to have been incurred as part of their entrepreneurial activity. This includes the ability to recover VAT from other EU states other than where it is located.
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