Take Your Business Global – Get Your VAT Number

Everything you need to know about VAT numbers

Creating a company for business relations abroad means an international audience, more sales potential, and, less attractive, more VAT documents. VAT registration number is important for trading. We will explain what is the VAT identification number, who needs it and how to get it.

What is VAT number?

The Value Added Tax Registration Number (abbreviated «VAT Number» or «VAT Registration Number») is an individual identification number of companies that operate internationally, it is a consumer tax in most countries of the world. The VAT number allows international tax authorities to track and tax the transactions of these companies. VAT payer identification number is crucial for all important administrative procedures of the authorities.

VAT is collected at each stage of the supply chain – from production, distribution to final consumer. With the correct VAT setting in most cases should not become a cost to your company.

The VAT Payer Number is the identification number for companies registered as a VAT payer.

There is no VAT system in the USA, but if necessary companies can register and report VAT in Russia, EU, UK, Australia and some parts of Asia. The numbers are approved by the tax authorities if your company conducts business in your country, which by law requires VAT reporting.

Each country issues its own national VAT number. For example, if enterprises supplying goods or services to several EU countries may be required to obtain a VAT payer number in each of those countries.

Who needs a VAT number?

Every company that sells goods or services in other countries requires a VAT number. The VAT number helps regulate often complex tax procedures. However, if a company trades exclusively in the territory of one country, it does not need a VAT payer registration number – the usual tax payer identification number is sufficient.

In particular, the business must register with the VAT payer in the following cases:

• when it supplies goods or services subject to VAT;
• when it carries out the purchase of goods within the EU;
• when he receives services for which he is obliged to pay
• when it provides services for which the customer is obliged to pay VAT

Generally, remote sales thresholds or general tax registration do not apply to foreign enterprises. For example, the threshold for VAT registration in Romania is 300,000 lei (88,500 euros) and the threshold for remote sales is 10,000 euros. When a company registered in the UK starts selling goods or services taxable in Romania, the company cannot benefit from any of the above benefits. Thresholds and register need from the first euro. Because the first threshold (88,500 euros) is intended for local enterprises, and the second threshold is for enterprises established in the EU.

Why is that important?

If you request VAT without a valid VAT payer number from your supplier, this could result in HMRC rejecting your claim. If this happens, you will have to pay bills or deal with a lot of administrators to fix the situation.

Get EU VAT refund

Companies that have received the VAT number may demand a refund of the VAT paid for the goods and services they have purchased for their business. This reduces the taxable income of your company in the EU and saves your money.

After registration you will receive a certificate of VAT registration. VAT payer number you will need to specify in the following cases:

• Creating an online VAT account
• Filling quarterly VAT declarations
• Payment of quarterly VAT bill
• Refund of any VAT paid for goods and services purchased for commercial use
• Invoicing of VAT to customers
• Configuring accounts with some suppliers
• Accountant or tax consultant

Thanks to our team you will be able to get the VAT payer number in the chosen jurisdiction. We also undertake all tasks related to the VAT number, such as regular filing of VAT declarations. If you are interested in individual information and how to automate VAT payment, feel free to contact us! Order a call today!