Why You Need to Register for VAT: The Importance of Compliance

2 Reasons Why You Need To Register VAT In Europe

Hey there! Have you heard about Value Added Tax (VAT) in Europe?

It's a tax on goods and services that is crucial for businesses operating in Europe. 

If you're not familiar with it, don't worry! I, Vova Even, recently had a chat with Nick Penev from Hellotax, a company that specializes in VAT registration.

In this article, we'll go over the reasons why you need to register for VAT and what happens if you don't comply. 

We also discuss OSS aka One-Stop-Shop.

Plus, as a bonus for my followers, Hellotax is offering a discount coupon code (VOVA10) for their services. 

You can access the offer using this link: https://bit.ly/Hellotax. 

It also grants you a free consultation :)

So, let's dive into the world of VAT!

Wait! Want a video version of this article? It's embedded right below!

Reason 1: Distance Selling Threshold Limit is No Longer Valid

The first reason for registering for VAT is the distance selling threshold limit, which used to vary from country to country. 

For instance, the threshold was €100,000 in Germany.

Hellotax software is used to follow these thresholds and notify you when you exceeded them. 

However, this is no longer important since the introduction of the One Stop Shop (OSS) on July 1, 2021.

Once your annual turnover exceeds €10,000, you have the right to register for the OSS. This means that you no longer have to register for VAT in each country where you have customers.

If your company is based in the US or the EU, you can register for the OSS in your home country. This will allow you to store goods and deliver them to the rest of Europe without having to register for VAT in each individual country.

However, if you only have a single storage location, you can register for VAT in that country instead. The procedure for registering is similar in both cases.

Reason 2: You Store Goods in Multiple Markets

The second reason for registering for VAT is if you store goods in multiple markets. 

In this case, you are required to register for VAT in each country where you store goods. This used to be a major hassle, but with the introduction of the OSS, you can now register in your home country and use it to make VAT payments across the EU.

If you sell on Amazon or other marketplaces, you may be required to register for VAT in each marketplace where you sell. This is because you are deemed to be making taxable supplies in those countries, even if you do not have a physical presence there.

However, with the introduction of the OSS, you can now register for VAT in your home country and use it to report and pay VAT on all your sales across the EU.

The Consequences of Non-Compliance

If you fail to register for VAT or submit incorrect VAT returns, you may face penalties and interest charges. 

These can add up to a significant amount over time and put your business at risk. It is therefore important to ensure that you are registered for VAT and that you are compliant with all the relevant regulations.

Conclusion

In conclusion, registering for VAT is an important step for any business operating in Europe. It is no longer as complicated as it used to be, thanks to the introduction of the One Stop Shop.

Make sure that you are compliant with all the relevant regulations to avoid penalties and interest charges. If you have any questions about VAT registration or compliance, seek professional advice from an experienced accountant or tax advisor. 

And while we're on this subject, why not take advantage of a free consultation offered by Hellotax? 

They're experts in this field and can provide you with valuable insights and advice. Just click here to book your consultation now and take the first step toward ensuring that your business is VAT compliant!

Also, code VOVA10 will save 10% on their services.

That's it for today. See you next time!

Best regards,

Vova :)

P.S - Want to read a full review about Hellotax? The article that discusses it is here. While the video is below. Enjoy!