Concept Definition
What is VAT registration?
VAT registration is the process by which a business formally registers with a tax authority to collect, report, and remit VAT. Registration is mandatory once a business exceeds the registration threshold in a jurisdiction. Registered businesses receive a VAT identification number and must file periodic VAT returns.
What are VAT registration thresholds?
Registration thresholds vary by country. Businesses below the threshold are not required to register. Key examples:
- UK: GBP 90,000 annual turnover (2024)
- Germany: EUR 22,000 annual turnover
- France: EUR 85,800 for goods, EUR 34,400 for services
- UAE: AED 375,000 mandatory threshold, AED 187,500 voluntary threshold
- Australia: AUD 75,000 annual turnover
Frequently Asked Questions
- Is VAT registration required for foreign businesses selling in the EU?
- Yes. Foreign businesses supplying goods or services to EU customers may be required to register for VAT in the EU, either in the country of supply or via the One Stop Shop (OSS) for digital services and distance selling.
- What is a VAT registration number?
- A VAT registration number (also called VAT identification number or VAT ID) is a unique identifier assigned by the tax authority upon registration. In the EU, it consists of a country prefix and alphanumeric digits. It must appear on all VAT invoices.