This article outlines the circumstances that might make you liable for VAT registration in various jurisdictions. It primarily focuses on situations where you might be required to register for VAT even if you don't have a physical establishment in the country. The article also provides region-specific information, including the European Union, the UK, Norway, Switzerland, Australia, and New Zealand, and emphasizes the importance of consulting with local tax advisors for definitive guidance.
VAT Registration Obligations
You may be required to register for VAT if your business carries out taxable supplies of goods or services within a specific jurisdiction. Here are some scenarios where registration might be necessary:
Supplying goods or services to businesses in the jurisdiction exceeding a certain threshold.
Supplying goods or services to consumers residing in the jurisdiction exceeding a set threshold.
Remember that VAT registration thresholds and requirements can differ significantly between jurisdictions. It's crucial to confirm the specific rules with the local tax authorities or a tax advisor in the relevant country.
VAT Registration within the EU
Even without a physical presence (like a local company or branch), you might need to register for VAT in an EU Member State if your business conducts taxable supplies of goods or services exceeding a specific threshold. The regulations vary across EU Member States, so confirming the VAT registration requirements in each country is essential.
Here are instances where you might need to register, assuming your taxable supplies exceed the set threshold:
Selling goods locally to businesses within the EU Member State (note that some Member States have domestic VAT reverse charge rules, exempting you from VAT registration).
Selling goods locally to consumers residing within the EU Member State.
Acquiring goods from another EU Member State (typically requiring VAT registration in the destination Member State).
Engaging in "distance sales" of goods to consumers (shipping goods from one Member State to a consumer in another), exceeding a specific turnover threshold, requiring VAT registration in the consumer's Member State.
For detailed information on EU VAT regulations, refer to this resource: https://assets.ey.com/content/dam/ey-sites/ey-com/en_be/topics/e-commerce-new/e-commerce-vat-rules/ey-e-commerce-vat-package.pdf
Country-Specific VAT Information
Here's a summary of VAT registration requirements for non-resident businesses in specific countries:
UK
Non-UK businesses selling taxable goods or services in the UK must register for VAT regardless of the value. VAT representatives are currently not mandatory for EU or non-EU businesses registering for UK VAT.
For detailed information, see: https://www.gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat/vat-notice-7001-should-i-be-registered-for-vat#Taxable-supplies
Norway
Non-Norwegian businesses with taxable sales exceeding NOK 50,000 in Norway within a 12-month period must register for VAT. Businesses residing in numerous specific countries are exempt from appointing a VAT representative. However, businesses outside these specified countries might need a VAT representative in Norway.
For more information, see: https://www.skatteetaten.no/en/business-and-organisation/vat-and-duties/vat/register/
Switzerland
Non-Swiss businesses supplying goods in Switzerland and required to account for Swiss VAT (global turnover exceeding CHF 100,000) must register for VAT. Appointing a tax representative is mandatory if supplying goods or services subject to Swiss VAT.
Australia
Non-resident entities making taxable supplies or importations in Australia are generally not required to have a tax representative for GST purposes. However, GST on supplies or imports made through a resident agent is payable by the agent, although the non-resident entity might still need to be GST registered.
For more information, see: https://www.ato.gov.au/business/international-tax-for-business/in-detail/doing-business-in-australia/australian-gst-registration-for-non-residents/
New Zealand
Foreign businesses with taxable supplies exceeding NZD 60,000 in New Zealand within a 12-month period must register for GST. Voluntary registration is possible for businesses below the threshold, and non-established businesses not making taxable supplies can register to recover incurred GST. Appointing a GST representative in New Zealand is not mandatory.
For more information, see: https://www.ird.govt.nz/gst/registering-for-gst
Please note that the information provided in this article is for general knowledge and should not be considered financial or tax advice. For specific guidance, consult with a qualified tax advisor or local tax authorities.