Fiscal Representation in the EU: Obtain Your VAT Number in the EU

A fiscal representative is designated by a company to handle all declarative obligations regarding VAT within the European Union when conducting taxable operations in a state other than its country of origin. The fiscal representative or tax agent is responsible for: 

Obtaining an intra-community VAT number (registration), Verification of invoicing flows and tax documents, Filing VAT returns, Filing Intrastat declarations, Handling communications with the local tax authority. 

The difference lies in the geographical situation of the company: 

If you are a company established outside the European Union (for example: Switzerland, USA...) and engage in taxable operations in one of the European Union states, you are obliged to appoint a fiscal representative in that country. 

In the case where you are a company established within the European Union and engage in taxable operations in another member state, you enlist a tax agent to handle all administrative formalities related to VAT (obtaining VAT number, VAT declaration, Intrastat declaration...). 

Certain operations require you to be liable for VAT in other European Union states (for example: importation, buying and reselling, exceeding turnover threshold...). To comply with the European directive and establish its obligations, it is common to use the services of a specialized firm. 

Yes! Any company established outside the European Union that engages in taxable operations in one of the member states is required to appoint a fiscal representative there. The representative is responsible for ensuring compliance with all tax obligations of the represented company. 

The representative assumes responsibility with the authorities of the country and automatically becomes jointly responsible in case of fraud, delay, or failure to meet tax obligations. 

The timeframe for obtaining a VAT number varies depending on the country. However, as a general rule, it typically takes around 4 to 6 weeks! For more information, feel free to contact us via our contact form. 

When a company fails to adhere to VAT rules properly, it can lead to several problems, much like not following the rules of a game. Here's what can happen: 

Fines and penalties: When your company fails to meet its VAT obligations, either through late payment or errors in calculations and declarations, the tax authorities can impose financial penalties. These penalties can vary, they may be proportional to the amount of VAT owed, reflecting the seriousness of the delay or error, or take the form of fixed fines intended to punish the offense. This measure aims to encourage companies to meet deadlines and ensure the accuracy of their declarations.

Late payment interest: Just as banks apply interest on loans, tax authorities calculate interest on late-paid VAT amounts. These interests are calculated day by day, from the payment deadline until the day the payment is actually made. This measure encourages companies to quickly regularize their situation to limit the financial impact of these additional interests. 

Tax audits: Non-compliance with VAT obligations can trigger tax audits by the authorities. These audits are designed to thoroughly examine your company's accounts and verify the accuracy of your VAT declarations. A tax audit can be both time-consuming and demanding in terms of documentation to provide. It highlights the importance of keeping accurate and up-to-date records to effectively respond to the authorities' requests and avoid further complications. 

When selling products or services to customers in other EU countries, it's important to understand how invoicing works regarding VAT. Here's what you need to know: 

Mandatory details: These include details about your company and your customer (such as names and addresses, SIREN, and intra-community VAT numbers), the description of the product or service sold, and the transaction date. 

VAT number: If you sell to businesses in other EU countries, you must indicate your VAT number and that of your customer on the invoice. This shows that the transaction is an intra-community sale, allowing you to invoice without VAT in compliance with the 2020 Quick Fixes. 

VAT rates: Depending on the type of product or service you sell and where your customer is based, you may have to apply different VAT rates or even no VAT at all. Therefore, it's important to know the specific rules that apply to your transactions. 

To assist you, we have written a detailed blog post explaining all the mandatory details on invoices regarding VAT. 

No! This is the primary advantage of using the services of a fiscal representative or agent. Registering your company in another member state does not imply the creation of a permanent establishment. 

By engaging in taxable operations in a country, you are solely liable for VAT. In other words, only VAT obligations need to be fulfilled. For everything related to corporate tax, accounting, etc., it remains in your country of origin. 

Yes! A company can have a VAT number in each member state of the European Union. It is common for a company operating regularly in different EU countries to have multiple VAT numbers. In fact, some states assign 2 VAT numbers, a local VAT number, and an intra-community VAT number. 

The European Commission has established a website for real-time verification of the validity of an intra-community VAT number. Simply enter the VAT number and the country of allocation on their site by clicking on our tool for verifying intra-community VAT numbers in the EU. 

The cost varies depending on the complexity of the operations, the country involved, and the tax stamps or registration fees applied in the relevant state. Generally, the cost of registration ranges from 700 to 1,500 € depending on the circumstances.  

To register for VAT, it's important to note that the required documents can vary from one country to another. However, there is a common set of documents generally requested by the majority of tax authorities. Here are the essentials: 

Company Articles of Association: This document describes the rules under which your company is organized and operates. It includes information such as the company name, its purpose, and details regarding partners or shareholders. 

Kbis (or equivalent document depending on the country): The Kbis is an extract from the trade and companies register that proves the legal existence of your company. It contains key information such as the legal form, the registered office address, the identity of directors, etc.

ID of the manager: A copy of the manager's ID card or passport is often required to confirm their identity. 

Regarding the translation of documents, requirements vary significantly from one country to another. Some countries accept a simple translation of documents, Deepl or Google Translate. Other countries, however, require a sworn translation, meaning it's done by a translator officially recognized by judicial authorities. In some cases, an apostille procedure may be required. An apostille is a form of international certification that authenticates a document for use in another country. It is generally necessary when translated documents need to be officially recognized by the tax authorities of a foreign state. 

VAT, or Value Added Tax, is a tax applied to most goods and services. However, the VAT rate is not uniform everywhere; it varies from country to country. 

Within the European Union (EU), each Member State sets its own VAT rate within certain common rules defined by the EU. There are generally three types of rates: the standard rate, which applies to most goods and services, and one or more reduced rates for specific categories of products or services (such as books, medicines, or food). Some countries also apply a super reduced rate to certain items, and there may be cases of complete VAT exemption. 

Outside the EU, countries like the United Kingdom (UK), Switzerland, and Norway also have their own VAT rates, distinct from those applied in the EU. These differences can have a significant impact on how you manage pricing and accounting for your business. 

To assist you, we have compiled a summary table of VAT rates applicable in all EU Member States, as well as in the United Kingdom, Switzerland, and Norway. This table is a valuable tool for quickly comparing VAT rates and planning your business and accounting activities accordingly across these regions. 

VAT self-assessment on importation is a mechanism that allows companies registered for VAT in the importing country not to pay import VAT at customs, but instead report this amount in their local VAT declaration. 

Not all countries practice VAT self-assessment on importation. 

For example, France, the United Kingdom, and Belgium practice VAT self-assessment on importation. France has even generalized it to all companies with a FR VAT number. 

Countries like Germany and Switzerland do not apply VAT self-assessment on importation. The cash flow implications are significant because the importer will have to advance the VAT amount at the time of importation.