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| | VAT reports (11th Jan 24 at 4:48pm UTC) | | A value-added tax (also known as VAT) is levied in some countries from selling/purchasing certain goods and services. Generally, it can be defined as a consumption tax estimated and charged based on the value being added. Usually, VAT is considered destination-based, as application of VAT depends on the jurisdiction of the seller and purchaser. It must be noted that VAT provides almost 20% of total tax amount charged worldwide.
Whenever you choose to do business in the EU, you are surely to face the question of VAT number registration. VAT questions are complex. Nevertheless, all EU Member States follow EU VAT Directive, thus each EU country worked out its own legislation towards VAT requirements and reports.
As soon as the company is registered for VAT number, it must regularly file its VAT report, which will contain information about the incoming and outgoing invoices, whether those were issued / received by other EU counterparties or non-EU partners or not. Most importantly, all deals must be declared in the VAT report, including invoices where 0% VAT was applied.
Compulsory VAT registration for EU companies
There may be several conditions, when an EU based company is required to register for VAT and submit VAT reports. In most of the EU jurisdictions, VAT registration should be done in the following cases:
By thresholds
When a company registered in the EU reaches certain sales turnover, it is required to register for VAT. The thresholds for obligatory VAT registration are determined by VAT Law of each EU Member State. For example:
€16,000 in Estonia,
€30,000 in Austria,
CZK 1,000,000 in Czech Republic,
etc. | |
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