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VAT in Europe

Rules about VAT in Europe. General guidelines.



Not all European companies are registered or are required to levy VAT on their products and services.

Rules on Administration of VAT

There are three important rules:

  • For the import and sale of products, if there is a certain amount of turnover in any one European country, you may be required to register for VAT in that country.
  • For the sale of services, VAT is charged in the country for which a service is provided. For example: In the case of property-related services, you need to look at the VAT rules in the place where the property is located. In the case of professional services, depends on where the professionals are providing the service in question.
  • For distance sales, for example sales by internet, you need to register in any European country where turnover exceeds a certain amount, agreed by law initially.

Is it necessary to declare?

The company that offer the services has some flexibility to decide whether to declare or not. If you have benefits in excess of the limits within which it must be stated, technically may be required to collect VAT on manufactured goods with retroactive effect.

Is it necessary to state whether the company you use has been established outside the EU?

Usually you need to register the foreign company somewhere in Europe if you want to do significant business in Europe. It is inevitable if:

  • It has significant sales in a country
  • It has employees in any country